How Banks Steal Almost $2 Billion From Us Yearly

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How Banks Steal Almost $2 Billion From Us Yearly

Posted by msaleem 1185 days ago, popular 1185 days ago (http://www.billshrink.com)
Category: Personal Finance | Tags: banks economy money personal finance

This chart sheds some light on the incredibly profitable bank practice of offering automatic overdraft “protection.”

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franklin 1185 days ago

While overdraft fees are too high in my opinion, they are in effect a loan if the bank is not returning your item. It is our responsibility to know how much money is in our accounts.

furball4 1185 days ago

If it's our responsibility, it's a responsibility we have to the payee, not to the bank. What difference does it make to the bank if I attempt a transaction that my account cannot fund? The obvious and simple answer is for the bank to refuse the transaction. It doesn't cost them a penny to do so, if it costs them anything at all.

With point-of-sale card transactions in particular this is especially ridiculous. Is it my responsibility to know what's in my account to the *penny*? What if I know I have "almost $40" and I want to buy something that is also "almost $40". Is it irresponsible of me to attempt a debit transaction? I can't imagine how. This may not happen on a primary account very often, but I keep a personal account with a very low balance for small personal purchases. My balances are between $0 and $300 at any given time. I spend weeks at a time below $50. There is nothing irresponsible about cutting it close and being unsure of my funds status, so long as I'm not leaving the payee on the hook.

Fortunately I moved to a small local bank and they are willing to customize accounts when asked. They have disabled overdrafts of any form on my account, thus ending my occasional purchases of $32 soda pops, $36 sandwiches, and $43 paperbacks. Best of all, I no longer have to experience the reality distortion field around the shift manager as they attempt to explain how allowing the $32 soda transaction without my knowledge was a service they extended to me, their valued customer. Good riddance. I just wish that a major bank would take the initiative and offer a customer-centric set of options so their users can manage their overdraft "protections". An off switch would be a good start.

thekritz 1184 days ago

I think both comments are valid. On the one hand, it is the accountholder's responsibility to know his account balance (you wouldn't complain if you were charged for bouncing a check, right?). At the same time, it wouldn't kill the banks to create an on/off switch, so as to prevent overdraft in the first place. As the article pointed out, however, this is extremely unlikely as banks lack incentive.

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