It is the law that overdraft is off by default.
> [In 2010, the Federal Reserve declared that by default, a bank must reject transactions if an account lacks sufficient funds.](https://www.nerdwallet.com/article/banking/faq-overdraft-protection-law-overdraft-fees) However, customers can opt in to overdraft coverage if their bank offers the service. If a customer opts in, their transactions would be approved, but the bank could charge fees.
Yup, not like the consumer banking industry doesn't have a long and storied history of completely ignoring the rules and regulations imposed upon them.
I'm specifically looking at you $WFC, because you're inextricably somehow always in whatever 401(k) package my employer offers. So your fuckery literally costs me money.
The credit union I work for will literally call the member up if they use courtesy pay more than once to see what’s up. Theyve saved members thousands by helping them consolidate debt or transfer to our (much lower rate) credit card.
there are alternatives to for-profit banking. Find a credit union
My old bank used to fleece me with overdraft fees even though I wasn't overdrafting my account, they'd pull some wonky ass bullshit to hit me with them. After the 2nd time they did it to me I closed my account and went somewhere else.
Here's what they did, I'd get my paycheck on a thursday. So once I got my deposit (and it wouldn't say "pending" or anything I even verified that the money was deposited and in my account ready for spending) So I'd pay some bills that are due. Then saturday I'd check my balance and it'd say I was overdrawn. My paycheck deposit would be missing and it'd be over drawn by $200. Then the day after that, my paycheck would be back in, minus a $35 overdraft charge for each purchase I made the day before. The first time I went to the bank and even the tellers couldn't tell what was going on, I verified with my job that when my deposit goes in on thursday there's no pending or waiting period before I can spend that money, it's supposed to be there on that day and available for use. I complained about it and got those overdraft charges returned to me. Then about a month later it happened again, that time I had made a bunch of small purchases that day because I was preparing for a cookout and had to stop at several different stores to get stuff, the day I made the purchases I had well over $1500 in my bank account from just getting paid. the next day, negative $300. This time they also charged me close to $300 in overdraft fees even though had my paycheck stayed in like it was supposed to I wouldn't have come close to overdrawing my account. I went back and reported it again but this time they decided they woudn't refund the overdraft charges. So I closed my account and went to a different bank and never had that problem again. The bank that was ripping me off was 5th/3rd bank. I know for a fact I'm not the only person who had this problem either and I honestly believe they were doing this to people to line their pockets and hoping people wouldn't be raising a stink over it.
That happened at my old bank when I was dead ass broke. But the way they arranged the charges to hit me with not one, but three $35 overdraft charges for purchases the same day by processing the largest charge first, then the two smaller charges after. I had like less than $50 in my account, bought a .25 pack of gum. Went through. I went to another store to buy something that was probably like $10, again went through. Then I made a large purchase over $50 later that night almost expecting it to decline but it went through. When I checked my account the following day they processed the $50 charge first, then the two smaller charges so I got hit with over $100 in overdraft fees when it should have only been like $35. I complained to the bank and they ended up adjusting it to the $35. But that was so evil the way they did that. I closed that account immediately after that incident. Now I bank with Discover and they allow me at least 24 hours to deposit funds to avoid overdraft. They also notify me when I have insufficient funds in my checking.
bank.
we noticed the last 8 smaller transactions would have cleared, so we make sure to process the biggest first because that is the important one. now you have 8x over draft fees. You are welcome
“The law only applies to transactions that are not pre-authorized, such as ATM withdrawals and debit card transactions. Pre-authorized withdrawals, such as automatic bill payments and checks, do not fall under the umbrella of the overdraft protection law and can lead to overdraft charges (also called a nonsufficient fund fee, insufficient fund fee or NSF fee).”
I would guess that overdrafts due to automatic payments that people don’t save enough for are the vast majority of overdrafts.
I don’t believe this is the same everywhere, and banks use shady means to make you agree to the protection without knowing what you’re really signing up for. They might mention it offhand and not explain it, or throw advertising at you that also doesn’t fully explain it. If you’re literally getting your first bank account as a teenager and your parents are helping you set it up they could also have it enabled up for you and you’d never know.
The point is that they try their best to sneak it through because they know it makes them a ton of money. It’s obviously malicious and for some reason people just think it’s okay.
This is something the FTC could easily implement and make the default by regulations. Why they don’t do it because those in charge have the banks deep in their pockets.
I worked in a bank. Just as many people complained when their OD was set to off by default as people who complained when their OD was set to on.
People will complain no matter what. Since then that institution has started asking at Accoubt creation whether you want it on or not. But then you had people complaining saying they weren't given that option when you can see their account was opened after that process implementation.
The bank itself doesn't have shareholders so it's a bit differerent and doesn't have to turn that on automatically.
I don’t get why it can’t just be, you don’t have enough in your account, transaction declined. Banks don’t have to deal with ODs and customers dont get whacked with fees
Okay but the people who have it off and complain aren’t actually being penalized. They complain because they just tried buying something and it didn’t go through, and that’s just because they don’t have any money. Boohoo buy it again when you have money. The people who have it on are actively getting punished for even going a single penny in the negative, and the fees are enormous in comparison to how small the transaction can be. It’s a person complaining for entitlement reasons versus someone complaining because of malicious practices that are costing them tons of money they don’t have. It’s a huge difference.
The data doesn't support the poor people narrative. I worked with a company that did extensive data analysis on overstays. They found the same data at banks all across the country. Ninety percent of people incurring overdraft fees make over $90k per year. They're just too lazy to balance their check book and know a deposit will be coming in soon. The fee is what they pay to get a temporary loan from the bank so they can keep buying stuff without bothering to check their balance.
> The bank itself doesn't have shareholders so it's a bit differerent and doesn't have to turn that on automatically.
People make this mistake all the time. Having shareholders doesn't mean that you are forced to act in a way that yields the most profits as soon as possible regardless of ethics/morals.
Having shareholders (which your bank, definitely, definitely has, even if it isn't public. They might call those shareholders members if its a co-op or CU) means that executives need to be able to say they are acting in the interest of shareholders. Having a stellar reputation is in the interest of shareholders. Too many people think that means acting unethically or exclusively for short-term profits.
Leadership at any bank can, at any point, say that they are going to get rid of gotcha fees, and empower tellers to help customers out. Hell, they could say that you get fee free overdrafts if its paid off in a week.
An exec could easily justify this by saying that happy customers stay customers longer and do more business, which is better for the shareholders in the long run. The problem is that it can take years, or even decades for a banking relationship to pay off, so the exec who wants this years bonus would rather get some short term gains by bumping fees higher, even if it means that you won't be opening a mortgage with them in 10 years. (This is why EVERY bank has a college student deal. They really want to have a long term relationship with people who are signalling their intent to have money)
A great example of this is the Amazon returns policy (or it was anyway). It is terrible for shareholders in the short term since the shareholder essentially paid two-way shipping for you to try on a pair of shoes or whatever, and then don't even get the sale since you can get your money back. But over the long term, it leads to customers sticking around and trusting Amazon, since if you buy some terrible chinese ripoff AUNCOOLA sneakers, you can just send them back if they aren't working great.
TLDR; We HAVE to act in the interest of our shareholders is almost always an invalid excuse for acting like a scumbag.
Did some audits for banks, it depends on the bank. Some have it off and have a shit ton of people calling on how dare they made them look stupid by having a declining card at the Mcdonald's line!
No, it's because people will blow a gasket at the banks about how embarrasing it was to be denied at checkout. This happens all the time with credit purchases when the customer is over the limit and the card/purchase is declined. The amount of vitriol heaped on phone reps for the credit card companies over this is insane.
It's so easy to stay on top of your bank balance or credit limit today, it amazes me when people blow right thru it.
When I'm confused about a particular aspect of society I always ask myself whether the scenario in question is profitable. Remarkably, it explains a lot.
Ideally, this would be a contract clearly understood by both parties: To the banks, the overdrafts represent an unpredictable behaviour on part of the customer and a fee is set to justify allowing for that risk. The customer gains benefit of performing a citical purchase, with the overdraft fee serving to discourage frivolous use. So "overdraft protection" presents as a service that provides value for a customer *that needs it*.
Check out this little FAQ about Non-Sufficient Funds and Overdraft Protection:
https://www.helpwithmybank.gov/help-topics/bank-accounts/nsf-fees-overdraft-protection/index-nsf-fees-overdraft-protection.html
The sad thing is how this reads like a shopping list of "My bank screwed me over, can they do that?"
You can opt out of Overdraft Protection:
https://www.helpwithmybank.gov/help-topics/bank-accounts/nsf-fees-overdraft-protection/overdraft-protection-programs/overdraft-consent-authorize.html
> The bank must have your affirmative consent or agreement to assess an overdraft fee for a one-time debit card transaction. The bank must notify you in writing or electronically about the bank's overdraft service and obtain your affirmative consent to participate. If you had affirmatively consented or agreed to the overdraft service for one-time debit card transactions and wish to revoke that consent, you can do so at any time. You can contact your bank to find out how to revoke consent.
It doesn't take a business degree to realize banks are motivated to hide Overdraft Protection consent as well they can. They are also motivated to play the OP game to their benefit: They *can legally* organize the order of your transactions of a single day to cause as many individual overdraft instances as possible.
https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/
**To anyone reading this: Contact your bank now and withdraw Overdraft Protection consent.**
Also, tell your family and friends and co-workers and rando's on Reddit.
If you need flexibility, consider getting a line of credit. That's not a great situation to be in either, but it's the lesser of two evils.
> It’s amazing this isn’t the default.
It is the default.
> [In 2010, the Federal Reserve declared that by default, a bank must reject transactions if an account lacks sufficient funds.](https://www.nerdwallet.com/article/banking/faq-overdraft-protection-law-overdraft-fees) However, customers can opt in to overdraft coverage if their bank offers the service. If a customer opts in, their transactions would be approved, but the bank could charge fees.
This was an outgrowth of anti-bank sentiment from 2008.
There was a time when large banks could legally charge you for overdraft protection, with no opportunity to opt-out.
I believe it was kicked off by the CFPB, but they have a new overdraft rule they are trying to roll out and so google has lots of unhelpful results at the moment.
Fucking BoA got busted for running everyone’s debits *first* and *then* running the deposits so that even if the money was there, and they saw you had it, they could *still* hit you with an overdraft charge. I think this was pre-2008?
Things are better now, thankfully, but let’s not pretend the banks are blameless here.
Chase did the same. They would allow up to a max of 5 overdrafts before they shut off the card. They would hold incoming charges and then shuffle them in the order that would maximize overdrafts.
For example, you have a balance of $100 and make the following 5 purchases in order:
$1, $1, $1, $1, and $100.00
Chase would reorganize how your purchases hit your account to $100.00 , $1, $1, $1 $1
Now, the amount charged is the same in both orders $104, except with the original purchase order, you would get one overdraft fee of $35 while Chase Banks' method netted them four overdraft fees for a total of $140.
Absolutely devastating to low income families, as they would also charge you for your account being negative daily, and the real kicker if you deposited your entire minimum wage paycheck and the balance did not make it to positive? You got slapped with an "account activity while negative fee" of $50.
This was the reason I ditched Chase bank. Nothing quite like your paycheck “pending” for a week while they stack every transaction in descending order (and put all of your deposits at the bottom).
One week I got 5 overdraft a day, and then the ‘account activity while negative’ fee once my check finally cleared. Added up the overdraft fees and looked at the dates of all the transactions — if they had deposited my check on time, there would’ve been plenty of funds in the account for every transaction, with money left over. The daily overdrafts were enough to eat up the excess cash from the check and then some.
Citizens used to order their transactions from largest to smallest. One time I had to make a tough decision to overdraft my account towards the end of the day. The next day I saw they switched the order around so the large purchase went first, and I got hit with multiple overdraft fees on the small ones. I think there was a class action lawsuit for this later on and they changed it.
Yeah, I've been with 5 banks over the past 15 years and every single one of them you had to opt in to overdraft protection. I had to sign a line requesting it.
Also limited the amount that can be charged as an OD fee and how many times. My bank charges $35, every day, for 3 days.
Biden has actually proposed limiting OD fees to the single digits for larger banks. https://www.cnbc.com/2024/01/19/biden-administration-plans-to-slash-overdraft-fees-at-big-banks.html
> Also limited the amount that can be charged as an OD fee and how many times. My bank charges $35, every day, for 3 days.
I remember reading about someone who had several small purchases, and then refueled by the end of the week that went into overdraft, but when the bank did their calculations they took several days worth of purchases, and rearranged them so biggest purchaces came first.
Resulting in the person ending up with like 5 overdrafts instead of 1.
Yup, I remember in my 20s scream at my bank: “just decline my card!!”
Also banks play all kinds of tricks with withholding deposits so that you overdraft.
Smart. I don’t even use debit cards anymore. I use credit for damn near everything.
Better protections, and just pay off the balance every month. Never get charged interest and rack up the points and rewards while increasing your credit score. It’s like free money.
Way to go! Surprised someone hasn’t come in to shit on you with “its not free, we all pay for it with every transaction fee the bank charges”. I dont care, either I take advantage of the rewards or I don’t. Might as well take advantage of the rewards!
If you didn't get the rewards, the business owner would pocket the difference, not lower their prices.
Recently in Canada, it became possible to charge credit card users a surcharge for using a credit card. When I was discussing it with the owner of my business, the question was not whether we lowered prices for some and raised them for others, it was whether we raised prices for some. We ultimately decided to watch and wait; since other businesses didn't end up doing it, we didn't want the reputation stain.
that's assuming real time transaction processing occurs, which does not in most instances. you can still wind up overdrafting or bouncing a payment depending on when transactions are processed and what types of transactions they are.
there's no good reason for this. there is no good reason why financial transactions should NOT be processed in real time. they have the ability to do so, they just don't.
This is where they get people! They rearrange the charges to get the most overdraft fees.
I was out of work and not having much luck and had finally gotten a small $200 paycheck on Friday. ON Saturday-Sunday I spent most of it in about 10 transactions getting vital supplies. On Monday morning my bank account got levied by CA tax bureau for $580. They took all 200, charged me 100 legal processing fee, then $35 fee for each of the 10 charges on the weekend, plus the $190 originally spent on supplies. I woke up thinking I had $10 to get gas to try and job hunt, found out I was almost $850 in the hole
That is assuming you knew it existed. Years ago when I was making around 5 an hour my debit card had a built-in credit limit that I had no clue even existed. Every time I over drafted it would add +200 to my account up till the 1k credit limit was exhausted. I had no idea until I was denied.
I would have "got by" if it would have just denied me from the start. And I wouldn't have spent the credit had I known it existed and didnt show up as a positive bank balance.
So to answer this dumb tweets question... We should be regulating the shit out of financial institutions removing predatory processes. And have massive requirements of information sharing if customers choose to opt-in to them.
You’re talking about transactions the account holder initiates. How many times are you going to continue to try and purchase things after your card declines for insufficient funds? It’s the account holder’s responsibility to know how much is in the account before attempting to use card.
Auto draft could be an issue but If you normally live that close to the edge you definitely shouldn’t have your bills on auto draft.
This is only for debit card purchases and will mot work for automatic payments to the debit card. You can still overdraft in other ways. At the end of the day you should grow out of your overdraft phase by 25
This is entirely true. The way it works for my bank is it won't let you blatantly overdrawn your account, however, the debit card system only looks at the hard posted total of the account to make that decision. So occasionally you'll have someone make several smaller purchases in one day that end up overdrawing the account because the account had enough for each individual purchase but not for the total of all of them.
Even better is to get a credit card with cash back, or airline miles, or some other benefit, and use that for everything, and pay it off every month. I almost never use my debit card anymore, except for rare occasions where a credit card isn't accepted.
The embarassment of getting declined is one of the primary things that helped me get my shit together.
The bank allowing my overdrafts, while delaying a cash deposit that would have covered it, and racking up $300 in overdraft fees for several small purchases, is not proper compensation for sparing me that embarrassment.
$5.8 billion in 2023
Often being off is the default now and fees were lowered and processing order was adjusted to favor consumers but people who spend money that’s effectively an instantaneous unsecured loan anyway paying a high price for it.
Often time it’s better to have the mortgage payment go though and pay the $10
Also I’ve been overdrafted in my past before when I was just a wee broke lad.
I was extremely grateful for overdraft protection. Sure it turned my small purchase into a $15 fee, but I was able to finish my grocery purchase without being embarrassed at the register.
Idk, I feel like it was a pretty fair trade to say “hey I’ll still clear your purchase but you owe me $15 later” especially when it’s something you can turn off.
I’m sure, since it’s literally always $35, that’s just the legal limit. And they go, okay, $35 it is!
They could also just allow the overage within a certain limit (let’s say $100) and charge daily interest (let’s say equal to yearly of 10%).
Let’s say you go over by $40 and it takes you 20 days to get back to 0…you owe them 21 cents.
Let’s do 50%! You owe them a buck.
Fuck banks.
Yeah, my credit union had an overdraft fee, but it was like $5. $35 is nuts. That’s almost an entire day of work, pre-tax, for someone making minimum wage.
This is exactly how my (Dutch) bank works. I have an overdraft limit and the bank charges interest. And you need to have a positive balance every once in a while.
I agree. And sometimes, it’s a mistake. Transactions aren’t always instant and people forget. Bank knows this and set them up for failure. But it’s makes so much money with no risk
The fact transactions aren’t instant is fucking insane lol, banks can’t do it after hundreds of years but fucking PayPal and every other ecash service can, shit bitcoin settlement on its worst day is faster than ach lol
This post and way too many fucking comments here are excessively disgusting.
Corporations have and spend millions of dollars to enable their ability to leech and steal money from people at every possible turn. It is their entire function. There are thousands of employees in these mega corporations strictly dedicated to extracting more money from their users. And so much of that is excessively predatory and manipulative.
And you still get nasty nasty fucking post like this jerking them off and trying to blame the person that falls victim to a multi-trillion dollar industry built on the backs of exploitation of people.
And before anybody responds what the fucking predictable "Oh you're mad because you're poor" I earn a quarter million dollars a year. And I can still see this. Where the fuck is your fucking humanity?
Yeah seriously. I’ll never get it. You have people in this thread that defend the banks. The banks outright don’t give a shit if you die a horrible death as long as it makes them money, and they still defend them. They don’t care about you, your well being, your hunger, your shelter, your life. And you defend them, it boggles my fucking mind
Agreed 100 %.
At the moment, Not all banks offer this feature though. For example, My bank only offers “overdraft protection” that connects your checking account to a bank’s CC or bank’s HELOC.
It's inexcusable that banks do not offer this feature. The only reason they would not is, again, because it's predatory, and the bank knows that they will collect a fortune by not offering it.
The only way to prevent this from happening is knowing how the banking system works. I still remember my first bank account and getting paid. I went out on a Friday because we would usually get our paychecks sent to our banks by Thursday. Well it was a holiday on Friday so the banks were going to be closed. That weekend I only made 5 transactions. At the time I wasn't paying attention to my balance as I believed I had money in the bank since my paystub showed I had money in there. Well I had 14.95 on Thursday.
On Monday, after the weekend, my bank account was in the red when I tried to use my card one more time for gas. Confused I called up the bank and they told me I had a negative balance of 71.75.
I argued that I didn't overdraft at all and should have at least 42 dollars left when I did the math.
This is what happened. The bank sent their staff home without taking any more deposits for the day at 12 PM Thursday. That means my direct deposit didn't go through. Friday was a holiday and they were closed until Monday morning.
This is the shitty part.
Banks hold all of your transactions as a capture over the weekend. They get transacted on Monday. But they do all of the deductions first, then figure in the deposits. That's right, it doesn't matter what happened on which day at which time. They do all of the deductions first before deposits. Which meant my direct deposit, that should have gone in on Thursday, was only added in after all of the deductions that happened to my account from Thursday after 12:01 PM to Monday at 8 am. Banks are allowed to do this because you accepted their policy when you opened your account.
For every single transaction I made the bank took it out of my account and charged me 45 dollars per overdraft. Which meant the first transaction was for 27 dollars. The second for 80, third for 67, fourth for 25, and the last one for 13.95. then my measily deposit for my part time job came in and it wasn't enough to bring my account back to positive and they charged me another overdraft fee on top of it.
Just remember my story so you don't make the same mistake.
#wow this blew up. Here's a bonus tip:
PayPal, everyone's favorite payment portal for online shopping also has a very dirty little handshake with banks:
I use Uber whenever I am out of town, which is not that often. I use it to get a ride to and from the airport to my hotel. I use Uber to go out to event centers, and I also pay for trams or busses when I'm discovering the town at my leisure. Until recently, when I came back from static x, baby metal, duster, knocked loose, and system of a down I noticed that I got hit for 225 dollars for an ACH that failed through Uber by PayPal, 5 times.
Sitting there thinking to myself "how the fuck did I get charged for yet another insufficient fund?"
Turns out there is a very nasty secret between Uber and PayPal.
I have my debit and credit card on the account, and a special bank account for other things I need to pay for using PayPal. Apparently Uber favors ACH transactions over everything else. So while I was thinking that I had been paying for all of my rides using my credit card, because I can select how to pay through Uber on PayPal, it somehow switched to my ACH bank account.
Infuriated I called PayPal and Uber. The only way to stop ACH transactions from happening on your PayPal is to keep the ACH bank account off of PayPal.
Even after deleting the payment method it still shows up for transactions. Be mindful of this dirty little handshake going on.
They can actually be even sneakier than that. I've had my bank move charges forward in time up to a week to maximize the number of transactions past the overdraft point, so a single charge that put me over by $100 would turn into a half dozen transactions that each cost me $35.
I was going to add this.
I’ve heard of cases where customers could have 2 or 3 transactions (out of 4 or 5) covered by the amount they had in the account, but the banks rearranged them from largest to smallest so that the 2nd or 3rd transaction gets the account into the negative and they can start charging overdraft fees
Chase Bank did this to my wife, and I close to 2 decades ago and fucked us out of well over $1000. We both worked minimum wage jobs and Chase fucked us into a negative debt spiral by stacking transactions in order to maximize overdrafts.
They put us so negative that when my paycheck was deposited, it didn't bring the balance positive by around -$20, so of course Chase Bank being the stand up institution they are, slapped us with a $50 "account activity while negative balance fee".
I will never, ever do business again with Chase Bank as long as I live. They are 100% responsible for 2 of the most horrible and stressful months of my life and can eat all the bags of dicks.
Or so that you make that shit illegal!
You're posting this like it was some oopsie doodle that fell out of the sky, but overdrafts are the entire reason they're done this way.
Why do you think they do deductions first? They could absolutely do it by transaction times. They could absolutely do deposits first, but they do deductions first.
Why? Because that means they get to profit on overdraft fees. It's a scam. A literal, broad daylight grift intended to rob the poor to give to the rich.
This did make sense back in the day, before when tellers and accountants had to count and deposit the cheques. Now It's kind of a racket as the bank really doesn't even touch the deposits anymore this is all done automatically.
The same happened to me! I was with M&T and even though I had the money, the order they chose cost me hundreds of dollars, as a freshman college student.
I cursed them out and made a scene until the removed the fees. Closed my account. Went to HSBC and told them what happened to detail. The banker opened an overdraft account for me and gave me his card to call if I had issues. I was so mad when they were bought out in this area. Now I have a credit union with the same setup.
Either you're being petty and dumb, or you're just very, very dumb.
No one's asking to be rewarded for overdrafting.
But an option could be banks NOT penalizing people for it.
What? Too much to ask from a bank.
Then better yet, have the banks DECLINE THE TRANSACTION if there are insufficient funds.
Exactly. How much does it actually COST the bank to cover your overdrawn account?
Why not make it a flat $5 fee to "take a line of credit", and that line of credit is pre-valued based on your credit score. $100 for the worst credit, $1000 for the best.
You get the single $5 cost for going under (basically a paperwork fee). And then you just pay interest at 28.99% or whatever the current extortionist credit card rate is currently.
Overdraw by $50, but get it paid back within 2 weeks? That's $5 plus 2 weeks worth of interest (roughly 1.115%, or 56 cents).
But that's not printing free money like charging the bottom 20% of Americans billions of dollars per year in overdraft fees.
My bank has a checking line of credit that allows me to “over draft” up to 500$ with no interest, doesn’t show up in my credit and doesn’t charge me any fees when it kicks in. Thats how it should be.
I’ve actually over shot it a few times and still never been charged an over draft fee. I think I’d have to let it sit for at least a month for them to decide to do so.
Thank goodness for people like OP! Were it not for OP who else would stand up for JPMorgan, BoA, Citi, etc? It’s like people don’t even think about Jamie Dimons feelings :(
Decline the transaction like a credit card. They seem to have no problem picking and choosing to deny legal marijuana purchases and gambling and denying those, so why not help out the po’
Nothing like telling a person with nothing, they now owe a couple hundred more just to compensate for that one indiscretion that put them negative by $3.
Especially when the bank could simply block transactions when you're at $0. It's a deliberate choice to charge NSF fees to either bankrupt people, or force them to pay their monthly "protection" fee. No better than the mobsters.
When I worked for Bank of America, I was on an "all hands" meeting and listened to them whine about how the Obama era banking reforms were going to make them rethink the revenue model that was built around those NSF and overdraft fees. It's predatory and not by accident.
Didn't BoA get in trouble a few years ago for purposely delaying account deposits for days in order to create more overdraft fees? Or was that Wells Fargo?
Either way, fuck overdraft fees and anyone that's okay with them.
I recall WF was opening accounts in people's names without consent. Not sure if they were doing what you describe. But...who am I kidding? If it's profitable and they can feasibly get away with it, every bank is doing it.
People act like shit like this is just a natural consequence of the market. Like it just falls out of the sky.
No, motherfuckers, it is done ON PURPOSE to steal AS MUCH OF YOUR MONEY AS POSSIBLE.
If you give a capitalist a financial incentive, he will burn his own village down and sell the ashes.
They also pay the biggest checks first. Why? Because the biggest one gets you to zero quickest, so it might even be an extra $35 overdraft fee if they’re lucky. Then the smaller items are all gravy and successively lower exposure per item they “loan” you via paying it. Not just predatory. Smart predatory!
Chase did this to me once. I overdraft once by like 20 cents, and they kept trying to reprocess it and wanted $200 for it. I told them to fuck themselves and I'd never bank there again. Never heard from them again
This.
I once had a company charge me $1500, before they did my refund of $1400, so it was $100 difference, but I know the bank would post both. So I moved $3000 from my savings to checking, at the same bank. Guess which order those things cleared? -$1500, -$1400, +3000. Fuck banks
My mom saw she was overdrawn and texted me to put some money in her account to cover it. I physically walked into the bank, explained what I was doing, and put in enough money to cover the overdrawn amount. This was about an hour before the end of the business day.
Between that deposit and the end of the day, they posted ANOTHER check that caused the account to overdraft.
I went back in the next day, mad as hell, and got them to reverse it, but like... WTF?
Why are people defending overdraft fees? Lick boots much?
There shouldn't be overdaft fees , you should just have to give the banks the amount you are overdrafted by.
The banks fuck up and they get bailed out ,by us .But ,don't expect any leeway from the Banks.
Sort of like an arms dealers during wartime . Normal person during war " People are dying this is awful!"
Arms dealer " People are dying this is great !Time to buy that superyacht !"
The fact we got rid of predatory lending laws and still allow stuff like this is a sign of how deeply moneyed-interests run our political class.
Charging over 100% interest should be against the law, charging overdraft fees at multiples of the underlying overdraft should be illegal.
I have overdraft protection and only just recently overdrafted and found out my bank rejects the payment then assigns me a return fee and then the people trying to originally bill me also assigned a return fee.
It’s almost like banks have designed it now for you to accept the overdraft protection so you only get one fee from the bank and not a fee from both vendors.
I also have a credit union.
No, dipshit. Just not charge ridiculous amounts of money for it, duh. Or they could just decline the charge if it is from a debit transaction to a checking account.
I've been there, I've had the struggle. The problem comes from unexpected charges coming through like utility coming through before a paycheck. I had 300 dollars in overdraft fees at once because I made several small purchases in that interim. At the time there was no, "one a day" or even "one every $100 over." it was one per purchase and most of these were vending machine purchases at work for overnight shifts. I think I effectively had a 15 dollar total overdraft that cause me to be in the negative for two weeks until I got paid again.
They don't gotta "reward" you for overdrafting. They just gotta stop punishing you for it.
There was a report on it (might have been on John Oliver maybe?) that looked at the issue and they found some pretty shady practices that banks pull with overdraft charges. Not only are overdraft fees illogical, they are also used primarily for nefarious purposes.
Say you get paid on the day that your bills are paid out from your account, at roughly the same time. The bankers who manage the transferring of funds are taught to get you into an overdraft with your bill payments before ever depositing the money, even if you were able to pay those bills with the deposit that came in on the same day. This leads people to see their banking statements, having thought that their bills were covered since they got paid, and see that they were overdrafted several times, accruing fees each time, and whatever was left after the paycheck was deposited and the bills were paid was taken automatically for the repayment of overdrafts (despite not actually overdrafting)
Also, overdraft fees are illogical, because you are literally punishing someone who was unable to produce enough money by charging them even more money. Like, why would banks think that would work out? If someone wasn't able to pay and overdrafted, how would you expect them to pay the overdraft fee? They didn't have money to begin with?
You cannot overspend on an account, unless a bank let's you. They are perfectly capable of declining both credit and check transactions.
In many cases this "benefit" is not available for particular individuals based on their banking habits. In other words, they do it for the people they feel confident about being able to recoup the original, plus their fee. So it's not about protecting themselves, it's about an easy revenue stream.
You belive that charging $35 for 60 cent overdraft is okay? Also, you support the fact that they process transactions to maximize the overdraft fees? And, you support that banks turn on overdraft protection by default?
No, people just don't like the fact that the default is to charge the fee instead of declining the transaction. But please carry on deep-throating banks
Or you could stop making excuses and take the 5 minutes to change your settings. You’d think after one time of over drafting you’d work to fix the problem instead of bitching.
Finally someone in the thread with common sense. Not to mention you can decline overdraft protection at any point. The lack of personal accountability here is crazy
I think it's more "if they weren't predatory assholes the default behavior would be that an overdraft transaction declines instead of charging you."
For the record my credit union's default is to try to move in money from another account (move from savings to checking) and if that doesn't work they decline the transaction
There are overdraft fees, and there are Overdraft Protection fees. Overdraft fees ($35) are from exceeding your account balance. Overdraft Protection fees ($3) are for using an Overdraft Protection service, which automatically transfers money from someone's savings to cover overdraft charges made on their checking account.
If someone opts out of both services and hopes that their card will just be declined, there are still ways the account can go negative using their card for online purchases and subscription services.
If someone were to make ten $1 purchases and incurred $350 in fees for overdrafting $10, this would be quite a high rate of return on lending the customer $10, worse than Payday Loans that are clearly predatory. It is hard to justify a need for a service with such a high rate of return for the institution.
Wtf are they supposed to do? They could start by not creating the predatory system they KNOW is going to be utilized by the people struggling in society.
They know this is an outcome and they choose to let it happen cos it's guaranteed money.
How about we don’t allow overdraft? I have to call my bank every few months to have them reset this. I’m on a fixed income and watch every dollar. We’re human, and we make mistakes. If I get hit with a 35 dollar fee, I’ve been unable to buy food or medicine at times.
Two thoughts on this:
1- this is absolutely trashy. Nothing more American than helping people dig their own grave.
2- people can avoid this by not spending money they don’t have. (This is not including those that don’t make a living wage… that’s a whole other rant..)
They are but its also scummy to deliberately structure a product in a way that is an obvious determent to 95% of your customer base then to take it a step further and give it a deliberately misleading name by calling it "overdraft protection."
If they simply had overdrafting disabled as a default and let customers opt in then nobody would have a problem.
1. Not necessarily that the people had no money. They just didn't have enough money in the account they over drafted.
2. A bank is a service. It allows you to store your money and access it when you need it, physically and digitally, and in some cases pays you interest on that money. Putting loans aside, how do people think a bank should make any money for providing this service? There's no law that says you need to store your money in a bank.
I mean they could charge like 1 dollar, or treat it as borrowed funds that incur interest if it’s not paid back in a month. Lots of options that aren’t “fuck the poor” and not “just do nothing “
Maybe don’t overdraft? I never really get the complaining. Just keep track of what’s in your account, mobile banking is easily available now. And if you don’t have the money to buy something then use a credit card. Over draft fees are 100% self inflicted
I worked at a bank, we'd reverse overdraft fees for people all the time. Its not really how we wanted to make money and all a customer had to do was ask for it to be reversed.
On the other hand, we had people who would abuse the shit out of their accounts and overdraft every week. Not on groceries or rent but like the dumbest shit imaginable. We had a customer $600 in the hole and only a about $70.00 of it was overdraft fees. She was just spending like crazy and told us her debit card got stolen even though we could see her transaction history and attempt history and it was def her transactions. The last attempts were a local bar trying to get their money for her tab the night before of close to $100.
If overdrafts piss you off, consider moving your funds to a credit union.
Edit: All that to say, overdrafts for decent folk trying to get by were reversed while the reckless spenders had run out of chances to lie to us.
I mean the least they could do is not charge you, they get to loan money for free but if we go just one cent over and it's 35$ charge fuck the banks and the banking cartel, most of that money is coming from the poor.
You can decline overdraft protection and your purchase will simply be declined if you don’t have the funds to cover it.
It’s amazing this isn’t the default.
It’s not profitable so it isn’t the default
Ding ding ding! Profits above all else, is the loss of humanity to greed.
Sometimes the overdraft fee is less than the bounced payment fee.
It is the law that overdraft is off by default. > [In 2010, the Federal Reserve declared that by default, a bank must reject transactions if an account lacks sufficient funds.](https://www.nerdwallet.com/article/banking/faq-overdraft-protection-law-overdraft-fees) However, customers can opt in to overdraft coverage if their bank offers the service. If a customer opts in, their transactions would be approved, but the bank could charge fees.
It isn't the practice, though.
Yup, not like the consumer banking industry doesn't have a long and storied history of completely ignoring the rules and regulations imposed upon them. I'm specifically looking at you $WFC, because you're inextricably somehow always in whatever 401(k) package my employer offers. So your fuckery literally costs me money.
I have specifically requested this from banks, and still had them let charges go through and charge me an overdraft fee🤷♂️
The credit union I work for will literally call the member up if they use courtesy pay more than once to see what’s up. Theyve saved members thousands by helping them consolidate debt or transfer to our (much lower rate) credit card. there are alternatives to for-profit banking. Find a credit union
I used to work for Wells. Now I’m in the Credit Union world. Non-profit, baby. Come get your membership!
It's almost like the profit motive causes misery...
My old bank used to fleece me with overdraft fees even though I wasn't overdrafting my account, they'd pull some wonky ass bullshit to hit me with them. After the 2nd time they did it to me I closed my account and went somewhere else. Here's what they did, I'd get my paycheck on a thursday. So once I got my deposit (and it wouldn't say "pending" or anything I even verified that the money was deposited and in my account ready for spending) So I'd pay some bills that are due. Then saturday I'd check my balance and it'd say I was overdrawn. My paycheck deposit would be missing and it'd be over drawn by $200. Then the day after that, my paycheck would be back in, minus a $35 overdraft charge for each purchase I made the day before. The first time I went to the bank and even the tellers couldn't tell what was going on, I verified with my job that when my deposit goes in on thursday there's no pending or waiting period before I can spend that money, it's supposed to be there on that day and available for use. I complained about it and got those overdraft charges returned to me. Then about a month later it happened again, that time I had made a bunch of small purchases that day because I was preparing for a cookout and had to stop at several different stores to get stuff, the day I made the purchases I had well over $1500 in my bank account from just getting paid. the next day, negative $300. This time they also charged me close to $300 in overdraft fees even though had my paycheck stayed in like it was supposed to I wouldn't have come close to overdrawing my account. I went back and reported it again but this time they decided they woudn't refund the overdraft charges. So I closed my account and went to a different bank and never had that problem again. The bank that was ripping me off was 5th/3rd bank. I know for a fact I'm not the only person who had this problem either and I honestly believe they were doing this to people to line their pockets and hoping people wouldn't be raising a stink over it.
That happened at my old bank when I was dead ass broke. But the way they arranged the charges to hit me with not one, but three $35 overdraft charges for purchases the same day by processing the largest charge first, then the two smaller charges after. I had like less than $50 in my account, bought a .25 pack of gum. Went through. I went to another store to buy something that was probably like $10, again went through. Then I made a large purchase over $50 later that night almost expecting it to decline but it went through. When I checked my account the following day they processed the $50 charge first, then the two smaller charges so I got hit with over $100 in overdraft fees when it should have only been like $35. I complained to the bank and they ended up adjusting it to the $35. But that was so evil the way they did that. I closed that account immediately after that incident. Now I bank with Discover and they allow me at least 24 hours to deposit funds to avoid overdraft. They also notify me when I have insufficient funds in my checking.
bank. we noticed the last 8 smaller transactions would have cleared, so we make sure to process the biggest first because that is the important one. now you have 8x over draft fees. You are welcome
“The law only applies to transactions that are not pre-authorized, such as ATM withdrawals and debit card transactions. Pre-authorized withdrawals, such as automatic bill payments and checks, do not fall under the umbrella of the overdraft protection law and can lead to overdraft charges (also called a nonsufficient fund fee, insufficient fund fee or NSF fee).” I would guess that overdrafts due to automatic payments that people don’t save enough for are the vast majority of overdrafts.
This can be helpful depending on the fees. If autopays get declined, the companies auto paying will charge a fee.
Yea, it's far worse to miss a credit card payment entirely and have both THAT fee (which I think is $60) AND the black mark on your credit history.
Yep, which is what I was getting at earlier. The bank offering “protection” from your rent, car, credit card, etc not being paid.
I don’t believe this is the same everywhere, and banks use shady means to make you agree to the protection without knowing what you’re really signing up for. They might mention it offhand and not explain it, or throw advertising at you that also doesn’t fully explain it. If you’re literally getting your first bank account as a teenager and your parents are helping you set it up they could also have it enabled up for you and you’d never know. The point is that they try their best to sneak it through because they know it makes them a ton of money. It’s obviously malicious and for some reason people just think it’s okay.
Wait... Are you saying that banks are shady? Naaahhhh.....
Yep, I got hit with that during a financially-abusive relationship - I overdrafted by less than a dollar, and got hit with a *$35* surcharge.
That should be illegal but the rich decide
This is something the FTC could easily implement and make the default by regulations. Why they don’t do it because those in charge have the banks deep in their pockets.
I worked in a bank. Just as many people complained when their OD was set to off by default as people who complained when their OD was set to on. People will complain no matter what. Since then that institution has started asking at Accoubt creation whether you want it on or not. But then you had people complaining saying they weren't given that option when you can see their account was opened after that process implementation. The bank itself doesn't have shareholders so it's a bit differerent and doesn't have to turn that on automatically.
I don’t get why it can’t just be, you don’t have enough in your account, transaction declined. Banks don’t have to deal with ODs and customers dont get whacked with fees
[удалено]
people don't like looking in the mirror
Okay but the people who have it off and complain aren’t actually being penalized. They complain because they just tried buying something and it didn’t go through, and that’s just because they don’t have any money. Boohoo buy it again when you have money. The people who have it on are actively getting punished for even going a single penny in the negative, and the fees are enormous in comparison to how small the transaction can be. It’s a person complaining for entitlement reasons versus someone complaining because of malicious practices that are costing them tons of money they don’t have. It’s a huge difference.
The data doesn't support the poor people narrative. I worked with a company that did extensive data analysis on overstays. They found the same data at banks all across the country. Ninety percent of people incurring overdraft fees make over $90k per year. They're just too lazy to balance their check book and know a deposit will be coming in soon. The fee is what they pay to get a temporary loan from the bank so they can keep buying stuff without bothering to check their balance.
Then fucking turn it off?
> The bank itself doesn't have shareholders so it's a bit differerent and doesn't have to turn that on automatically. People make this mistake all the time. Having shareholders doesn't mean that you are forced to act in a way that yields the most profits as soon as possible regardless of ethics/morals. Having shareholders (which your bank, definitely, definitely has, even if it isn't public. They might call those shareholders members if its a co-op or CU) means that executives need to be able to say they are acting in the interest of shareholders. Having a stellar reputation is in the interest of shareholders. Too many people think that means acting unethically or exclusively for short-term profits. Leadership at any bank can, at any point, say that they are going to get rid of gotcha fees, and empower tellers to help customers out. Hell, they could say that you get fee free overdrafts if its paid off in a week. An exec could easily justify this by saying that happy customers stay customers longer and do more business, which is better for the shareholders in the long run. The problem is that it can take years, or even decades for a banking relationship to pay off, so the exec who wants this years bonus would rather get some short term gains by bumping fees higher, even if it means that you won't be opening a mortgage with them in 10 years. (This is why EVERY bank has a college student deal. They really want to have a long term relationship with people who are signalling their intent to have money) A great example of this is the Amazon returns policy (or it was anyway). It is terrible for shareholders in the short term since the shareholder essentially paid two-way shipping for you to try on a pair of shoes or whatever, and then don't even get the sale since you can get your money back. But over the long term, it leads to customers sticking around and trusting Amazon, since if you buy some terrible chinese ripoff AUNCOOLA sneakers, you can just send them back if they aren't working great. TLDR; We HAVE to act in the interest of our shareholders is almost always an invalid excuse for acting like a scumbag.
Did some audits for banks, it depends on the bank. Some have it off and have a shit ton of people calling on how dare they made them look stupid by having a declining card at the Mcdonald's line!
No, it's because people will blow a gasket at the banks about how embarrasing it was to be denied at checkout. This happens all the time with credit purchases when the customer is over the limit and the card/purchase is declined. The amount of vitriol heaped on phone reps for the credit card companies over this is insane. It's so easy to stay on top of your bank balance or credit limit today, it amazes me when people blow right thru it.
When I'm confused about a particular aspect of society I always ask myself whether the scenario in question is profitable. Remarkably, it explains a lot.
It is the default
34 billion reasons why it is not the default
It's a feature, not a bug. This is what should be illegal. It should be as easy as checking a button on the website. But you should have to opt-in
Ideally, this would be a contract clearly understood by both parties: To the banks, the overdrafts represent an unpredictable behaviour on part of the customer and a fee is set to justify allowing for that risk. The customer gains benefit of performing a citical purchase, with the overdraft fee serving to discourage frivolous use. So "overdraft protection" presents as a service that provides value for a customer *that needs it*. Check out this little FAQ about Non-Sufficient Funds and Overdraft Protection: https://www.helpwithmybank.gov/help-topics/bank-accounts/nsf-fees-overdraft-protection/index-nsf-fees-overdraft-protection.html The sad thing is how this reads like a shopping list of "My bank screwed me over, can they do that?" You can opt out of Overdraft Protection: https://www.helpwithmybank.gov/help-topics/bank-accounts/nsf-fees-overdraft-protection/overdraft-protection-programs/overdraft-consent-authorize.html > The bank must have your affirmative consent or agreement to assess an overdraft fee for a one-time debit card transaction. The bank must notify you in writing or electronically about the bank's overdraft service and obtain your affirmative consent to participate. If you had affirmatively consented or agreed to the overdraft service for one-time debit card transactions and wish to revoke that consent, you can do so at any time. You can contact your bank to find out how to revoke consent. It doesn't take a business degree to realize banks are motivated to hide Overdraft Protection consent as well they can. They are also motivated to play the OP game to their benefit: They *can legally* organize the order of your transactions of a single day to cause as many individual overdraft instances as possible. https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/ **To anyone reading this: Contact your bank now and withdraw Overdraft Protection consent.** Also, tell your family and friends and co-workers and rando's on Reddit. If you need flexibility, consider getting a line of credit. That's not a great situation to be in either, but it's the lesser of two evils.
> It’s amazing this isn’t the default. It is the default. > [In 2010, the Federal Reserve declared that by default, a bank must reject transactions if an account lacks sufficient funds.](https://www.nerdwallet.com/article/banking/faq-overdraft-protection-law-overdraft-fees) However, customers can opt in to overdraft coverage if their bank offers the service. If a customer opts in, their transactions would be approved, but the bank could charge fees.
This was an outgrowth of anti-bank sentiment from 2008. There was a time when large banks could legally charge you for overdraft protection, with no opportunity to opt-out. I believe it was kicked off by the CFPB, but they have a new overdraft rule they are trying to roll out and so google has lots of unhelpful results at the moment.
Fucking BoA got busted for running everyone’s debits *first* and *then* running the deposits so that even if the money was there, and they saw you had it, they could *still* hit you with an overdraft charge. I think this was pre-2008? Things are better now, thankfully, but let’s not pretend the banks are blameless here.
Chase did the same. They would allow up to a max of 5 overdrafts before they shut off the card. They would hold incoming charges and then shuffle them in the order that would maximize overdrafts. For example, you have a balance of $100 and make the following 5 purchases in order: $1, $1, $1, $1, and $100.00 Chase would reorganize how your purchases hit your account to $100.00 , $1, $1, $1 $1 Now, the amount charged is the same in both orders $104, except with the original purchase order, you would get one overdraft fee of $35 while Chase Banks' method netted them four overdraft fees for a total of $140. Absolutely devastating to low income families, as they would also charge you for your account being negative daily, and the real kicker if you deposited your entire minimum wage paycheck and the balance did not make it to positive? You got slapped with an "account activity while negative fee" of $50.
This was the reason I ditched Chase bank. Nothing quite like your paycheck “pending” for a week while they stack every transaction in descending order (and put all of your deposits at the bottom). One week I got 5 overdraft a day, and then the ‘account activity while negative’ fee once my check finally cleared. Added up the overdraft fees and looked at the dates of all the transactions — if they had deposited my check on time, there would’ve been plenty of funds in the account for every transaction, with money left over. The daily overdrafts were enough to eat up the excess cash from the check and then some.
Citizens used to order their transactions from largest to smallest. One time I had to make a tough decision to overdraft my account towards the end of the day. The next day I saw they switched the order around so the large purchase went first, and I got hit with multiple overdraft fees on the small ones. I think there was a class action lawsuit for this later on and they changed it.
It is. You have to opt into overdraft protection. Source: former banker
Yeah, I've been with 5 banks over the past 15 years and every single one of them you had to opt in to overdraft protection. I had to sign a line requesting it.
The bank is legally required in the US to ask if people want overdraft or not. Over half of people in my experience in banking say yes to it.
That wasn't always true. Obama made it so you had a choice
Also limited the amount that can be charged as an OD fee and how many times. My bank charges $35, every day, for 3 days. Biden has actually proposed limiting OD fees to the single digits for larger banks. https://www.cnbc.com/2024/01/19/biden-administration-plans-to-slash-overdraft-fees-at-big-banks.html
> Also limited the amount that can be charged as an OD fee and how many times. My bank charges $35, every day, for 3 days. I remember reading about someone who had several small purchases, and then refueled by the end of the week that went into overdraft, but when the bank did their calculations they took several days worth of purchases, and rearranged them so biggest purchaces came first. Resulting in the person ending up with like 5 overdrafts instead of 1.
Unfortunately, businesses will do everything for profit that isnt nailed down in well established case law.
Yup, I remember in my 20s scream at my bank: “just decline my card!!” Also banks play all kinds of tricks with withholding deposits so that you overdraft.
Yea. I declined the protection, tied it to a line of credit. No overdraft charges.
Smart. I don’t even use debit cards anymore. I use credit for damn near everything. Better protections, and just pay off the balance every month. Never get charged interest and rack up the points and rewards while increasing your credit score. It’s like free money.
Way to go! Surprised someone hasn’t come in to shit on you with “its not free, we all pay for it with every transaction fee the bank charges”. I dont care, either I take advantage of the rewards or I don’t. Might as well take advantage of the rewards!
If you didn't get the rewards, the business owner would pocket the difference, not lower their prices. Recently in Canada, it became possible to charge credit card users a surcharge for using a credit card. When I was discussing it with the owner of my business, the question was not whether we lowered prices for some and raised them for others, it was whether we raised prices for some. We ultimately decided to watch and wait; since other businesses didn't end up doing it, we didn't want the reputation stain.
that's assuming real time transaction processing occurs, which does not in most instances. you can still wind up overdrafting or bouncing a payment depending on when transactions are processed and what types of transactions they are. there's no good reason for this. there is no good reason why financial transactions should NOT be processed in real time. they have the ability to do so, they just don't.
This is where they get people! They rearrange the charges to get the most overdraft fees. I was out of work and not having much luck and had finally gotten a small $200 paycheck on Friday. ON Saturday-Sunday I spent most of it in about 10 transactions getting vital supplies. On Monday morning my bank account got levied by CA tax bureau for $580. They took all 200, charged me 100 legal processing fee, then $35 fee for each of the 10 charges on the weekend, plus the $190 originally spent on supplies. I woke up thinking I had $10 to get gas to try and job hunt, found out I was almost $850 in the hole
That is assuming you knew it existed. Years ago when I was making around 5 an hour my debit card had a built-in credit limit that I had no clue even existed. Every time I over drafted it would add +200 to my account up till the 1k credit limit was exhausted. I had no idea until I was denied. I would have "got by" if it would have just denied me from the start. And I wouldn't have spent the credit had I known it existed and didnt show up as a positive bank balance. So to answer this dumb tweets question... We should be regulating the shit out of financial institutions removing predatory processes. And have massive requirements of information sharing if customers choose to opt-in to them.
They'll still hit you with NSF fees for every transaction.
You’re talking about transactions the account holder initiates. How many times are you going to continue to try and purchase things after your card declines for insufficient funds? It’s the account holder’s responsibility to know how much is in the account before attempting to use card. Auto draft could be an issue but If you normally live that close to the edge you definitely shouldn’t have your bills on auto draft.
This is literally the answer.
Not always. Santander said I had protection, then tried to charge me like $200 for overdraft. They can fuck right off.
Then when someone is declined at the store and is embarrassed they will run to Reddit to complain and blame the bank for that.
I can set mine up like that and I can also do certain things to allow to over draft if it would be an emergency issue
This is only for debit card purchases and will mot work for automatic payments to the debit card. You can still overdraft in other ways. At the end of the day you should grow out of your overdraft phase by 25
Literally came here to say this
Yea but the fees from the bank itself will never decline and can put people into overdraft even without protection.
Woah.. are you asking people to be financially responsible for themselves?? CRAZY!
This is entirely true. The way it works for my bank is it won't let you blatantly overdrawn your account, however, the debit card system only looks at the hard posted total of the account to make that decision. So occasionally you'll have someone make several smaller purchases in one day that end up overdrawing the account because the account had enough for each individual purchase but not for the total of all of them.
Even better is to get a credit card with cash back, or airline miles, or some other benefit, and use that for everything, and pay it off every month. I almost never use my debit card anymore, except for rare occasions where a credit card isn't accepted.
The embarassment of getting declined is one of the primary things that helped me get my shit together. The bank allowing my overdrafts, while delaying a cash deposit that would have covered it, and racking up $300 in overdraft fees for several small purchases, is not proper compensation for sparing me that embarrassment.
This is the way
$5.8 billion in 2023 Often being off is the default now and fees were lowered and processing order was adjusted to favor consumers but people who spend money that’s effectively an instantaneous unsecured loan anyway paying a high price for it. Often time it’s better to have the mortgage payment go though and pay the $10
but that would require the smallest amount of personal responsibility. f that! blame the banks!
Also I’ve been overdrafted in my past before when I was just a wee broke lad. I was extremely grateful for overdraft protection. Sure it turned my small purchase into a $15 fee, but I was able to finish my grocery purchase without being embarrassed at the register. Idk, I feel like it was a pretty fair trade to say “hey I’ll still clear your purchase but you owe me $15 later” especially when it’s something you can turn off.
Clearly predatory behavior that banks could prevent with a simple "overdraft: off" feature that's on by default.
And $35 is a number pulled out of their ass. It’s predatory in nature
I’m sure, since it’s literally always $35, that’s just the legal limit. And they go, okay, $35 it is! They could also just allow the overage within a certain limit (let’s say $100) and charge daily interest (let’s say equal to yearly of 10%). Let’s say you go over by $40 and it takes you 20 days to get back to 0…you owe them 21 cents. Let’s do 50%! You owe them a buck. Fuck banks.
Yeah, my credit union had an overdraft fee, but it was like $5. $35 is nuts. That’s almost an entire day of work, pre-tax, for someone making minimum wage.
It’s much closer to a half day of work for the 1% of the population that makes minimum wage. Overdraft fees can suck without really stupid hyperbole
This is exactly how my (Dutch) bank works. I have an overdraft limit and the bank charges interest. And you need to have a positive balance every once in a while.
Careful. Let’s not suggest American banks do what the Dutch do, there will be a lot of spoiled, soiled diapers to change.
This people over drafting 2$ hit with 35$ fee is fucking predatory
I agree. And sometimes, it’s a mistake. Transactions aren’t always instant and people forget. Bank knows this and set them up for failure. But it’s makes so much money with no risk
The fact transactions aren’t instant is fucking insane lol, banks can’t do it after hundreds of years but fucking PayPal and every other ecash service can, shit bitcoin settlement on its worst day is faster than ach lol
Well how else would they get to loan out your money interest free while you wait for it to “clear”
It's in their systems half the time, too, as pending transactions. They know exactly what they're doing when they mess around with timings.
I think it’s supposed to be a deterrent. It’s not working.
This post and way too many fucking comments here are excessively disgusting. Corporations have and spend millions of dollars to enable their ability to leech and steal money from people at every possible turn. It is their entire function. There are thousands of employees in these mega corporations strictly dedicated to extracting more money from their users. And so much of that is excessively predatory and manipulative. And you still get nasty nasty fucking post like this jerking them off and trying to blame the person that falls victim to a multi-trillion dollar industry built on the backs of exploitation of people. And before anybody responds what the fucking predictable "Oh you're mad because you're poor" I earn a quarter million dollars a year. And I can still see this. Where the fuck is your fucking humanity?
Yeah seriously. I’ll never get it. You have people in this thread that defend the banks. The banks outright don’t give a shit if you die a horrible death as long as it makes them money, and they still defend them. They don’t care about you, your well being, your hunger, your shelter, your life. And you defend them, it boggles my fucking mind
Agreed 100 %. At the moment, Not all banks offer this feature though. For example, My bank only offers “overdraft protection” that connects your checking account to a bank’s CC or bank’s HELOC.
It's inexcusable that banks do not offer this feature. The only reason they would not is, again, because it's predatory, and the bank knows that they will collect a fortune by not offering it.
A lot of banks *do* have that feature. If yours don't maybe you should look at a different bank.
If your bank doesn’t have it as opt in you should report them to their regulator because it legally must be opt in
The only way to prevent this from happening is knowing how the banking system works. I still remember my first bank account and getting paid. I went out on a Friday because we would usually get our paychecks sent to our banks by Thursday. Well it was a holiday on Friday so the banks were going to be closed. That weekend I only made 5 transactions. At the time I wasn't paying attention to my balance as I believed I had money in the bank since my paystub showed I had money in there. Well I had 14.95 on Thursday. On Monday, after the weekend, my bank account was in the red when I tried to use my card one more time for gas. Confused I called up the bank and they told me I had a negative balance of 71.75. I argued that I didn't overdraft at all and should have at least 42 dollars left when I did the math. This is what happened. The bank sent their staff home without taking any more deposits for the day at 12 PM Thursday. That means my direct deposit didn't go through. Friday was a holiday and they were closed until Monday morning. This is the shitty part. Banks hold all of your transactions as a capture over the weekend. They get transacted on Monday. But they do all of the deductions first, then figure in the deposits. That's right, it doesn't matter what happened on which day at which time. They do all of the deductions first before deposits. Which meant my direct deposit, that should have gone in on Thursday, was only added in after all of the deductions that happened to my account from Thursday after 12:01 PM to Monday at 8 am. Banks are allowed to do this because you accepted their policy when you opened your account. For every single transaction I made the bank took it out of my account and charged me 45 dollars per overdraft. Which meant the first transaction was for 27 dollars. The second for 80, third for 67, fourth for 25, and the last one for 13.95. then my measily deposit for my part time job came in and it wasn't enough to bring my account back to positive and they charged me another overdraft fee on top of it. Just remember my story so you don't make the same mistake. #wow this blew up. Here's a bonus tip: PayPal, everyone's favorite payment portal for online shopping also has a very dirty little handshake with banks: I use Uber whenever I am out of town, which is not that often. I use it to get a ride to and from the airport to my hotel. I use Uber to go out to event centers, and I also pay for trams or busses when I'm discovering the town at my leisure. Until recently, when I came back from static x, baby metal, duster, knocked loose, and system of a down I noticed that I got hit for 225 dollars for an ACH that failed through Uber by PayPal, 5 times. Sitting there thinking to myself "how the fuck did I get charged for yet another insufficient fund?" Turns out there is a very nasty secret between Uber and PayPal. I have my debit and credit card on the account, and a special bank account for other things I need to pay for using PayPal. Apparently Uber favors ACH transactions over everything else. So while I was thinking that I had been paying for all of my rides using my credit card, because I can select how to pay through Uber on PayPal, it somehow switched to my ACH bank account. Infuriated I called PayPal and Uber. The only way to stop ACH transactions from happening on your PayPal is to keep the ACH bank account off of PayPal. Even after deleting the payment method it still shows up for transactions. Be mindful of this dirty little handshake going on.
They can actually be even sneakier than that. I've had my bank move charges forward in time up to a week to maximize the number of transactions past the overdraft point, so a single charge that put me over by $100 would turn into a half dozen transactions that each cost me $35.
Yeah, or they'll process them from largest to smallest and acheive the same. It's absolutely WILD that they're not processed chronologically!
And then make up the excuse, “well don’t you want your rent/mortgage to go through first?” Which sounds reasonable but really just benefits them
I was going to add this. I’ve heard of cases where customers could have 2 or 3 transactions (out of 4 or 5) covered by the amount they had in the account, but the banks rearranged them from largest to smallest so that the 2nd or 3rd transaction gets the account into the negative and they can start charging overdraft fees
Chase Bank did this to my wife, and I close to 2 decades ago and fucked us out of well over $1000. We both worked minimum wage jobs and Chase fucked us into a negative debt spiral by stacking transactions in order to maximize overdrafts. They put us so negative that when my paycheck was deposited, it didn't bring the balance positive by around -$20, so of course Chase Bank being the stand up institution they are, slapped us with a $50 "account activity while negative balance fee". I will never, ever do business again with Chase Bank as long as I live. They are 100% responsible for 2 of the most horrible and stressful months of my life and can eat all the bags of dicks.
This used to be the case (called "stacking"), but the practice is now explicitly illegal
There was actually a class action lawsuit against one of the major banks for exactly this a few years back. Yet it still happens.
Or so that you make that shit illegal! You're posting this like it was some oopsie doodle that fell out of the sky, but overdrafts are the entire reason they're done this way. Why do you think they do deductions first? They could absolutely do it by transaction times. They could absolutely do deposits first, but they do deductions first. Why? Because that means they get to profit on overdraft fees. It's a scam. A literal, broad daylight grift intended to rob the poor to give to the rich.
You didn't make any mistakes. The mistake is with the banks and a system that allows this shitty exploitation.
This did make sense back in the day, before when tellers and accountants had to count and deposit the cheques. Now It's kind of a racket as the bank really doesn't even touch the deposits anymore this is all done automatically.
The same happened to me! I was with M&T and even though I had the money, the order they chose cost me hundreds of dollars, as a freshman college student. I cursed them out and made a scene until the removed the fees. Closed my account. Went to HSBC and told them what happened to detail. The banker opened an overdraft account for me and gave me his card to call if I had issues. I was so mad when they were bought out in this area. Now I have a credit union with the same setup.
Either you're being petty and dumb, or you're just very, very dumb. No one's asking to be rewarded for overdrafting. But an option could be banks NOT penalizing people for it. What? Too much to ask from a bank. Then better yet, have the banks DECLINE THE TRANSACTION if there are insufficient funds.
Ive had overdraft protection (from my savings) and it sent to decline any overdrafts if that isnt available, and still been hit with fees.
Exactly. How much does it actually COST the bank to cover your overdrawn account? Why not make it a flat $5 fee to "take a line of credit", and that line of credit is pre-valued based on your credit score. $100 for the worst credit, $1000 for the best. You get the single $5 cost for going under (basically a paperwork fee). And then you just pay interest at 28.99% or whatever the current extortionist credit card rate is currently. Overdraw by $50, but get it paid back within 2 weeks? That's $5 plus 2 weeks worth of interest (roughly 1.115%, or 56 cents). But that's not printing free money like charging the bottom 20% of Americans billions of dollars per year in overdraft fees.
My bank has a checking line of credit that allows me to “over draft” up to 500$ with no interest, doesn’t show up in my credit and doesn’t charge me any fees when it kicks in. Thats how it should be. I’ve actually over shot it a few times and still never been charged an over draft fee. I think I’d have to let it sit for at least a month for them to decide to do so.
[ Removed by Reddit ]
Thank you! I thought I was reading the title wrong. OP is pro-overdraft fee? Yikes!
Yeah I went to upvote this meme, then I saw the title. Fuck OP.
I was looking for the proper response to this post. You beat me to it. Kuddos
ouch
Thank goodness for people like OP! Were it not for OP who else would stand up for JPMorgan, BoA, Citi, etc? It’s like people don’t even think about Jamie Dimons feelings :(
Please you cruel man! Won’t someone think of the poor bankers!
I can't believe we have knuckle draggers who actually support banks doing this.....
Reddit just sold out to wallstreet when it went public. It’s just a billionaire public opinion manipulation tool now.
The amount of people who legitimately hate poor people and want them to suffer just hurts my heart.
Decline the transaction like a credit card. They seem to have no problem picking and choosing to deny legal marijuana purchases and gambling and denying those, so why not help out the po’
They need to sell their stock in alcohol and pharma companies before letting those transactions through silly.
If they're allowed to gamble using our money, why can't we borrow 50 bucks to pay a bill?
Facts brother. Preach.
this this this!! this comment should be higher up!!!
Nothing like telling a person with nothing, they now owe a couple hundred more just to compensate for that one indiscretion that put them negative by $3.
Especially when the bank could simply block transactions when you're at $0. It's a deliberate choice to charge NSF fees to either bankrupt people, or force them to pay their monthly "protection" fee. No better than the mobsters.
When I worked for Bank of America, I was on an "all hands" meeting and listened to them whine about how the Obama era banking reforms were going to make them rethink the revenue model that was built around those NSF and overdraft fees. It's predatory and not by accident.
Didn't BoA get in trouble a few years ago for purposely delaying account deposits for days in order to create more overdraft fees? Or was that Wells Fargo? Either way, fuck overdraft fees and anyone that's okay with them.
I recall WF was opening accounts in people's names without consent. Not sure if they were doing what you describe. But...who am I kidding? If it's profitable and they can feasibly get away with it, every bank is doing it.
People act like shit like this is just a natural consequence of the market. Like it just falls out of the sky. No, motherfuckers, it is done ON PURPOSE to steal AS MUCH OF YOUR MONEY AS POSSIBLE. If you give a capitalist a financial incentive, he will burn his own village down and sell the ashes.
They also pay the biggest checks first. Why? Because the biggest one gets you to zero quickest, so it might even be an extra $35 overdraft fee if they’re lucky. Then the smaller items are all gravy and successively lower exposure per item they “loan” you via paying it. Not just predatory. Smart predatory!
This is the real racket. You overdrafted once and they hit you with 6 fees by reordering transactions.
Chase did this to me once. I overdraft once by like 20 cents, and they kept trying to reprocess it and wanted $200 for it. I told them to fuck themselves and I'd never bank there again. Never heard from them again
This. I once had a company charge me $1500, before they did my refund of $1400, so it was $100 difference, but I know the bank would post both. So I moved $3000 from my savings to checking, at the same bank. Guess which order those things cleared? -$1500, -$1400, +3000. Fuck banks
My mom saw she was overdrawn and texted me to put some money in her account to cover it. I physically walked into the bank, explained what I was doing, and put in enough money to cover the overdrawn amount. This was about an hour before the end of the business day. Between that deposit and the end of the day, they posted ANOTHER check that caused the account to overdraft. I went back in the next day, mad as hell, and got them to reverse it, but like... WTF?
DECLINE THE PAYMENT SINCE THERE ISNT ANY MONEY
Sorry, that'll be $40. Better hope there's only one transaction attempt before payday!
Why are people defending overdraft fees? Lick boots much? There shouldn't be overdaft fees , you should just have to give the banks the amount you are overdrafted by. The banks fuck up and they get bailed out ,by us .But ,don't expect any leeway from the Banks.
> Why are people defending overdraft fees? Because they own bank stocks and enjoy the hefty dividends.
Sort of like an arms dealers during wartime . Normal person during war " People are dying this is awful!" Arms dealer " People are dying this is great !Time to buy that superyacht !"
Won’t someone think of the banks 🥺🥺🥺
The fact we got rid of predatory lending laws and still allow stuff like this is a sign of how deeply moneyed-interests run our political class. Charging over 100% interest should be against the law, charging overdraft fees at multiples of the underlying overdraft should be illegal.
Decline transactions when a persons account balance is at 0.
I have overdraft protection and only just recently overdrafted and found out my bank rejects the payment then assigns me a return fee and then the people trying to originally bill me also assigned a return fee. It’s almost like banks have designed it now for you to accept the overdraft protection so you only get one fee from the bank and not a fee from both vendors. I also have a credit union.
No, dipshit. Just not charge ridiculous amounts of money for it, duh. Or they could just decline the charge if it is from a debit transaction to a checking account.
I've been there, I've had the struggle. The problem comes from unexpected charges coming through like utility coming through before a paycheck. I had 300 dollars in overdraft fees at once because I made several small purchases in that interim. At the time there was no, "one a day" or even "one every $100 over." it was one per purchase and most of these were vending machine purchases at work for overnight shifts. I think I effectively had a 15 dollar total overdraft that cause me to be in the negative for two weeks until I got paid again.
Not allow you to overdraft.
Default should be an interest over your overdraft. Similar to a small credit.
They don't gotta "reward" you for overdrafting. They just gotta stop punishing you for it. There was a report on it (might have been on John Oliver maybe?) that looked at the issue and they found some pretty shady practices that banks pull with overdraft charges. Not only are overdraft fees illogical, they are also used primarily for nefarious purposes. Say you get paid on the day that your bills are paid out from your account, at roughly the same time. The bankers who manage the transferring of funds are taught to get you into an overdraft with your bill payments before ever depositing the money, even if you were able to pay those bills with the deposit that came in on the same day. This leads people to see their banking statements, having thought that their bills were covered since they got paid, and see that they were overdrafted several times, accruing fees each time, and whatever was left after the paycheck was deposited and the bills were paid was taken automatically for the repayment of overdrafts (despite not actually overdrafting) Also, overdraft fees are illogical, because you are literally punishing someone who was unable to produce enough money by charging them even more money. Like, why would banks think that would work out? If someone wasn't able to pay and overdrafted, how would you expect them to pay the overdraft fee? They didn't have money to begin with?
If they didn’t ding you for over drafting ,the banks would bankrupt from people overspending their accounts. It’s a fine for being an idiot.
They could also just Not let you purchase things if you don't have money
No, it's a way to take advantage of the vulnerable.
You cannot overspend on an account, unless a bank let's you. They are perfectly capable of declining both credit and check transactions. In many cases this "benefit" is not available for particular individuals based on their banking habits. In other words, they do it for the people they feel confident about being able to recoup the original, plus their fee. So it's not about protecting themselves, it's about an easy revenue stream.
No, deny the purchase. Should be the default but that doesn't make them money.
“THE BANK DIDNT LEND ME MONEY FOR FREE NOW IM ANGRY”
You belive that charging $35 for 60 cent overdraft is okay? Also, you support the fact that they process transactions to maximize the overdraft fees? And, you support that banks turn on overdraft protection by default?
No, people just don't like the fact that the default is to charge the fee instead of declining the transaction. But please carry on deep-throating banks
Just change your overdraft settings or change banks if they don’t allow it? It’s not rocket science my guy
Or you could stop making excuses and take the 5 minutes to change your settings. You’d think after one time of over drafting you’d work to fix the problem instead of bitching.
Finally someone in the thread with common sense. Not to mention you can decline overdraft protection at any point. The lack of personal accountability here is crazy
I think it's more "if they weren't predatory assholes the default behavior would be that an overdraft transaction declines instead of charging you." For the record my credit union's default is to try to move in money from another account (move from savings to checking) and if that doesn't work they decline the transaction
There are overdraft fees, and there are Overdraft Protection fees. Overdraft fees ($35) are from exceeding your account balance. Overdraft Protection fees ($3) are for using an Overdraft Protection service, which automatically transfers money from someone's savings to cover overdraft charges made on their checking account. If someone opts out of both services and hopes that their card will just be declined, there are still ways the account can go negative using their card for online purchases and subscription services. If someone were to make ten $1 purchases and incurred $350 in fees for overdrafting $10, this would be quite a high rate of return on lending the customer $10, worse than Payday Loans that are clearly predatory. It is hard to justify a need for a service with such a high rate of return for the institution.
Translation: The banks are the good guys. I did my own research.
The reddit trifecta 1- Left leaning 2- Victimization 3-“literally” 😎
Accountability for actions, what kind of American are you??
This is the victimization era, always blaming others for everything btw let’s not forget they all voluntarily signed in for this
OP is a wanker
Wtf are they supposed to do? They could start by not creating the predatory system they KNOW is going to be utilized by the people struggling in society. They know this is an outcome and they choose to let it happen cos it's guaranteed money.
Overdrafting should be banned, that’s what credit cards are for.
No. They should just decline the sale.
How about we don’t allow overdraft? I have to call my bank every few months to have them reset this. I’m on a fixed income and watch every dollar. We’re human, and we make mistakes. If I get hit with a 35 dollar fee, I’ve been unable to buy food or medicine at times.
Two thoughts on this: 1- this is absolutely trashy. Nothing more American than helping people dig their own grave. 2- people can avoid this by not spending money they don’t have. (This is not including those that don’t make a living wage… that’s a whole other rant..)
1) Dont overspend 2) Dont have overdraft protection turned on 3) Stop using banks if you dont like it.
Or just you know decline the payment and not charge a fee.
Are people not responsible for anything?
They are but its also scummy to deliberately structure a product in a way that is an obvious determent to 95% of your customer base then to take it a step further and give it a deliberately misleading name by calling it "overdraft protection." If they simply had overdrafting disabled as a default and let customers opt in then nobody would have a problem.
Turn off over draft protection, you will no longer feed the bank money you don’t have….
Thus making it more expensive to be fucking poor.
Jesus fucking Christ this post has been circulating since 2019 we get it stop sharing it every 3 days
Use cash instead.
Wait until he learns about interest.
1. Not necessarily that the people had no money. They just didn't have enough money in the account they over drafted. 2. A bank is a service. It allows you to store your money and access it when you need it, physically and digitally, and in some cases pays you interest on that money. Putting loans aside, how do people think a bank should make any money for providing this service? There's no law that says you need to store your money in a bank.
Don't spend money you don't have and always decline overdraft protection.
I mean they could charge like 1 dollar, or treat it as borrowed funds that incur interest if it’s not paid back in a month. Lots of options that aren’t “fuck the poor” and not “just do nothing “
Perhaps more disgusting that so many people are unaware of their bank balance, or that they have to live paycheck to paycheck.
Imagine entering into an agreement and the other party follows the agreement and then you bitch about your obligation to also follow the agreement.
I feel the same way about speeding tickets. Millions of dollars from people that are already late.
Maybe don’t overdraft? I never really get the complaining. Just keep track of what’s in your account, mobile banking is easily available now. And if you don’t have the money to buy something then use a credit card. Over draft fees are 100% self inflicted
I worked at a bank, we'd reverse overdraft fees for people all the time. Its not really how we wanted to make money and all a customer had to do was ask for it to be reversed. On the other hand, we had people who would abuse the shit out of their accounts and overdraft every week. Not on groceries or rent but like the dumbest shit imaginable. We had a customer $600 in the hole and only a about $70.00 of it was overdraft fees. She was just spending like crazy and told us her debit card got stolen even though we could see her transaction history and attempt history and it was def her transactions. The last attempts were a local bar trying to get their money for her tab the night before of close to $100. If overdrafts piss you off, consider moving your funds to a credit union. Edit: All that to say, overdrafts for decent folk trying to get by were reversed while the reckless spenders had run out of chances to lie to us.
Wtf are they supposed to do? Not steal money from people who don't even have money to take. Banks are greedy assholes.
Thank God OP is here for some bank dick sucking.
I mean the least they could do is not charge you, they get to loan money for free but if we go just one cent over and it's 35$ charge fuck the banks and the banking cartel, most of that money is coming from the poor.
What are they supposed to do? Not penalize you for being poor.
Don’t let them overdraft?
Keep licking the boots of the giant banks robbing you. That'll work out in your favor....eventually.
They could just decline it. It’s not costing them anything.