I qualified for a FEATURE from my Credit Union... an expensive one.

[merwin]

Apparently, due to my credit, the Credit Union that I go to put me on an Opt-Out feature (without telling me I was in it) that lets me overdraw my account. Overdraft Tolerance they call it. This means that if I don't have money in my account, they will still allow me to use my debit card and charge me $22 for every transaction... just like if you bounced a check. And the best part is, you are not notified that you've overdrawn.

This is especially lovely since I regularly go to 7-11 and pay for my $1.50 snack with my debit card. So now that $1.50 snack costs $23.50 and over the last two days I've racked up over $250 of overdraft fees.

Grrrrr... Oh, and to opt out of it, I have to write a letter to them. Great, huh?

I thought one of the great features of a debit card was that it would TELL YOU that you had insufficient funds.

[OPERATIONMINDCRIME]

1. Ummmm, Does Your Credit Union Allow You To See Your Balance Online?

If they do, check it religiously. That way you know how much money you have prior to making purchases.

Overdraft protection is generally viewed as a good thing by people. But it is generally up to those people to be responsible for their own finances and balances.

Sorry to hear you just got hit with that many fees, however. That does suck.

[TroglodyteScholar]

2. "I thought one of the great features of a debit card was..."

I thought one of the great features of a debit card was that it would TELL YOU that you had insufficient funds.

Not true. Common misconception, though. You really have to take the responsibility on yourself unless you just REALLY trust the bank enough to be the only record of your transactions and balance.

[OPERATIONMINDCRIME]

6. Self-Responsibility. It's A Wonderful Thing. n/t

[merwin]

31. State of NY Banking Department seems to disagree...

"If an account is overdrawn, it is not reasonable for a bank to honor the debit card transaction while at the same time assessing a fee for the "overdraft", without prior notice of the fee to the consumer. Whether or not the customer has an overdraft feature on the underlying checking account, any "overdraft" feature on the debit card should be optional, and the terms thereof should be clearly and conspicuously spelled out in the customer agreement. At the time a deposit account is opened, or by a subsequent mailing offering this feature, customers should be given a clear choice to either accept or decline. Finally, for those accepting an "overdraft" feature, fees should be reasonable."

http://www.banking.state.ny.us/il011220.htm

[ThomWV]

3. Go Tell Them Exactly What You Have Told Us

And demand they remove both the service and the fees. They'll do it.

[Donnachaidh]

4. predatory banking at it's finest

We were nailed by the same sort of nastiness at Xmas a few years ago. To the tune of $600 in overcharges. Watch your accounts ESPECIALLY during the holidays. The *smokey* accounting really kicks in then.

[OPERATIONMINDCRIME]

9. Wasn't The Bank's Fault Nor Was It Predatory.

With all due respect, it isn't the responsibility of the bank to babysit your finances. That's on your head. Check your balances regularly, keep track of your expenditures, and spend wisely. Why you and others are pinning this on the bank is beyond me.

A debit/check card is quite frankly just the modern form of a check. Hey, years ago, did your checks talk to you and tell you what your real-time balance was? No? They didn't? You mean, you had to be responsible and account for your own finances in order to ensure that you had money to pay for the purchase or risk bouncing the check and getting penalized?

Guess what. That hasn't changed. Debit card, check card, checks, credit cards, it's still up to you to be responsible in their use and aware of their balances.

[sandnsea]

14. Gosh

And setting up a situation where they cover overdrafts without informing you isn't predatory at all, nah. And businesses LYING about being charged for overdrafts and "passing it on to you", to the tune of $30 a check, isn't predatory either. People do need to be responsible for their own money, like they need to be responsible for locking their house. But that doesn't change the fact that predatory banking and business practices are trying to steal your money away from you any way they can.

[Donnachaidh]

16. with all due respect -- it WAS predatory

And we had been checking our balances. We were hit with these charges almost 3 WEEKS after the fact.

and this wasn't about a debit card -- it was a checking account.

[OPERATIONMINDCRIME]

19. How?

How are they responsible for you not calculating your balances correctly? How are they to blame for you spending money that you didn't have in your account? Did they lead you to believe that you had more in there then you truly did, due to some sort statement error? How exactly was this their fault?

I just don't see how this rests on the shoulders of the bank itself, is all.

[merwin]

28. IIRC, a checking account is not a credit account. Therefore, if there

isn't enough funds in the account to cover the transaction, it is up to their electronic system to come back with 'insufficient funds' and not allow the transaction to continue.

I enrolled in a system that would automatically transfer $50 at a time from my savings to my checking and charge me $3 fee... However, that is apparently limited by federal law to 6 transfers per month. So, after those 6 transfers they just start charging you $22 NSF each time and keep allowing you to do it.

[OPERATIONMINDCRIME]

32. Wait, So Let Me Get This Straight:

You've by your own admission overdrafted your checking account a minimum of 16-17 times in the past month's time, but it's the bank's fault.

Ummmm, Ok.

[Donnachaidh]

33. nice deflection -- but WRONG.

NO. we didn't overdraft our account.

The BANK was in fault, and pretty much said so after we called them on it.

Your point?

[OPERATIONMINDCRIME]

34. You Do Realize I Wasn't Talking To You, Correct?

If you replied to this post in error, and intended to reply to my other post above, I had asked in there if it was an error on the bank's part. Since it was, I hardly see how your story relates to the OP's, since in their case it was not the bank's error.

I'm glad the bank corrected their mistake. I can't stand when they make errors, cause it can have a tremendous financial impact on the person they made the error to. Sorry to hear you went through that.

[merwin]

40. Let's say you have a prepaid phone card... When you bought the

phone card, you were told that when the minutes expired, your phone card would stop working. Now, let's say that 6 months after you got the phone card they added a 'feature' that would allow you to use more minutes than were left on your phone card. They would just bill you an extra $20 every time you make a call... and demand that you pay it.

Is that right? Because that's exactly what they did.

[michreject]

44. The old excuse was

I can't be overdrawn, I still have blank checks in my checkbook.:)

[OPERATIONMINDCRIME]

45. LOL

That's pretty funny. :)

[Bill McBlueState]

5. i didn't think that was the case

I remember being warned when I got a debit card that, since there was no approval process at the time of the transaction, you could easily overdraw your account. But that was several years ago; maybe things have changed.

[Vincardog]

13. That is funny. When I worked for a bank doing their system to approve

ATM transactions, we went to great lengths to confirm the funds were available before approving the transaction.
Then we put a hold on the funds and approved the transaction. Then we debited the account after the transaction was confirmed.

[Bill McBlueState]

25. you clearly know more about this than I do

What you describe appears to happen when I make a withdrawal from an ATM. But when I use my Visa debit card (which is issued by my bank and tied to my checking account) to buy something, my impression is that Visa approves the transaction without looking at my available funds.

[Vincardog]

35. You know they cover themselves. I bet if they approve a transaction

where the funds are not available, they charge you for the privilege. If it ever happens look at the date/time stamp on the transaction/charge. I bet you dollars to donuts that the over limit charge is charged at the same time as the withdrawal.

[cynatnite]

7. We have that with ours...

Up to $500 overdraft and for each it's $29 charge. The charges can rack up so high that I'm scared to death to get overdrawn.

[demosincebirth]

8. Especially formatted for those with bad credit.

[merwin]

30. Actually, this feature is automatically imposed on people who have good

credit.

[demosincebirth]

38. People with good credit don't' overdraw on their checking account...

only the ones who have bad credit do. I have a daughter who constantly is overdrawn on her checking account. Banks love customers like her.

[merwin]

41. I beg to differ. We have a couple thousand dollars in our savings account

(for this particular bank account)... and the attached checking account only has a limited amount in it. For the past 6 years we have been without incident, however we just got a house and our finances are in a bit of a mess at the moment, with money shifting from one account to the next, and we went over by a bit.

Normally, we have it set up to transfer money from savings to checking and it charges us $3 if we happen to go below $0 on our checking... but apparently there's a federal law that limits the bank to 6 electronic transfers per account per month. We do a fair amount of transfering every month, so it did that once or twice and then started charging us these 'convenience' NSF fees.

In any case, both my wife and i have near-perfect credit scores, so your assessment is far from true.

[demosincebirth]

42. My credit rating A1, and I also have "overdrawn " protection, but they

still will charge me if I'm overdrawn. In 40 years of banking, I have never been overdrawn.
The point I was trying to make is that the banks use that as a gimmick to attract people who have a habit of overdrawing on their checking accounts. That "service" is also available to anyone who applies for a checking account(with good or bad credit). That free service would not attract people with A1, credit, but it would attract those (like my daughter) who have less than good credit and a habit of overdrawing on her checking account.

I understand what you're saying, but I wasn't inferring to your situation. If I didn't make myself clear, my apologies.

[merwin]

43. I could almost understand the point of the service if i signed up for it.

But it was something that they signed me up for and didn't notify me of. I called them again today to specifically ask them if this is a service that they tell you about, and they said no.

No need to apologize either!

[tammywammy]

10. At my credit union

If I use the debit card, and there's not enough money in checking, but there is in savings, it automatically transfers the funds from savings into checking, and they charge $5 for each instance it happens. So if I debit 3 transactions it would be $15! Ouch!

So I avoid it like the plague and check my bank account online every couple of days.

[ComerPerro]

24. $5 per incident is nothing compared to

the $35 per overdraft you would be charged if they didn't take from your savings...

Although, some banks will transfer the money for you for free...

[tammywammy]

36. It would kill me if they charge $35 the few times I've done it

I'd complain if they never told me or sent me a letter about it and it happened.

[merwin]

26. Oh, we have that too. $3 per transaction for us. However, there is

apparently a limit of 6 savings to checking electronic transfers per month... this is a federal limit.

[sandnsea]

11. That's why I use cash

My husband is awful awful awful with money. After 20 years of various checking account methods - I went to straight cash. I pay my bills with checks when necessary - otherwise it's all cash. I'm never overdrawn anymore, can't spend what you don't have! Just a suggestion and sorry about your difficulties. I'd go to the bank too if I were you - and cry if necessary.

[tammywammy]

17. I hate hate hate checks

I hate mailing out checks and do as much as I can online. To pay rent, I get a check from the bank. I gave them a personal check once, and the apartment complex held on to it for almost 2 weeks. If I mail out my electricity (they charge $5 to pay online, to mail it is) on a Friday it's taken out of my account no later than Tuesday. :)

[Lars39]

12. You also need to know *exactly* how long you have to report

theft so that you are not responsible if someone clears your account out. My 'window' changed from 3 days to 48 hours.
I try to check my online balance at least once and sometimes 2 or 3 times a day.

[niallmac]

15. True it is your responsibility to keep track of your balance but

if the ability to overdraw on your card at great dollar benefit to the bank
was not presented to you as a sign off item then I have to say the bank
is being a little sleazy.

[Viva_La_Revolution]

18. US bank does that too.

two $6.50 over drafts and they wanna charge me $344! :grr:

[OPERATIONMINDCRIME]

21. Now THAT Is Absolutely Absurd, Unethical and Sleazy.

I have NEVER heard of a penalty like that before. That's absolutely insane!

[survivor999]

20. Nice to get Deluxe service!

LOL.

[Catshrink]

22. B of A changed my dad's account to one like you describe

without his permission and with no notification. This was after he and mom had had the same kind of account with them for at least 10 years. One day, poof! there was this $25 charge for his type of account. My sister, who has PofA for dad, called and read them the riot act -- they took it off and we haven't seen it since. Gotta watch 'em!

[ComerPerro]

23. Well, that's just idiotic of you

[Katzenjammer]

27. Find a different credit union! That's against all Rochedale principles.

Or either get up a group of people to stand for election to the board on the plank of returning the credit union to its pro-populo roots.

[merwin]

29. Rochedale?

What's that?

[Katzenjammer]

37. Rochdale, sorry, I always misspell it

http://en.wikipedia.org/wiki/Rochdale_Principles

[scarletwoman]

39. Why not get a line of credit?

I use a credit union for all my banking and have a debit card, too. I was eligible for a "line of credit" account, and I have it set at the minimum; $250.

If I overdraw my checking account, they automatically debit the credit line. I forget what the interest rate is, because for years I've always paid the credit line back as soon as possible, so the interest rarely amounts to more than a few cents. There are no other fees involved.

Find out if you can get a line of credit. It's a whole different thing than what you're talking about. And for gawdsakes, start paying CASH for your $1.50 snacks at the 7-11!

sw