Sick of Unfair Overdraft Fees? Tell Us About It!

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, June 18th, 2013

Have you paid a fee for an unfair overdraft?

We want to hear your story about being slammed with overdraft fees (tell us about your experience here) so we can get a new bill moving in Congress that will protect consumers from this unfair practice. Several readers have already shared their experiences, like John of LeMoyne, PA:

“I have had too many overdraft charges to count, and some were for an amount less than one dollar. . . . Sovereign told me that their policy is, on any given day, to pay out the largest item presented to them, and then pay out the next smaller item, and so forth, until all checks, debits and charges are processed. And as we all know, if you have $50 in your account and the first item presented for payout is $45, that leaves $5 to cover everything else, so that’s a recipe for disaster.”

Stories like these are why Representative Carolyn Maloney (D-NY) recently introduced legislation in Congress that would limit the fees that banks can charge on overdrawn ATM and debit card purchases. Help us stop unfair overdrafts by sharing your story.

The Federal Reserve requires banks to obtain their customers’ approval before signing them up for overdraft programs that cover debit purchases and ATM withdrawals. The proposed legislation would give you further safeguards if you chose to opt-in to a bank’s overdraft program.

Key provisions of the bill include:

  • Overdraft fee policies must be transparent and fully disclosed;
  • The fees themselves must be “reasonable and proportional”;
  • Purchases and withdrawals must be debited in a logical, clearly-disclosed way. Some banks have been found to manipulate the order they process transactions to maximize the fees they charge.

Consumers Union strongly supports these reforms. A recent report from the Consumer Financial Protection Bureau (CFPB) showed that consumers in 2011 who opted into the programs spent, on average, $168 more per year in fees than other customers.

And banks profit enormously from these programs. According to the same report, banks make about 60 percent of their fee revenues from checking accounts through overdraft charges, even though less than a quarter of all customers have opted in.

We’re working hard to get this bill passed. In the meantime, consumers can protect themselves from overdraft fees by following these tips from Consumer Reports.

Have you experienced a problem with excessive overdraft charges? Please share your story!

33 responses to “Sick of Unfair Overdraft Fees? Tell Us About It!”

  1. Wer sich drehet und windet says:

    Depending on how your bank’s bill payment system works, and if you have a regular revolving overdraft agreement, the bank can gouge you for fees arising from bill payments that are finalized and posted as much as a week after you initiate them.

    Consider the following scenario:

    (1) You initiate a couple of bill payments, say $25 and $101.

    (2) Bank immediately shows reduction of $126 in your available funds.

    (3) Thinking you don’t have to worry about the $126, you’re short until your next deposit, but because you’ve got this overdraft agreement, you write a big check and cash it at your other bank. You know you’re incurring an overdraft fee by doing so, but that’s OK.

    (4) Several days later, the bank pays the $25 bill, but because you are in the overdraft, you get charged.

    (5) A day after that, the bank tries to process the $101 but now there are no longer sufficient funds because of the prior overdraft charge.

    (6) The bank may attempt to process the $101 a couple more times, dinging you for another overdraft fee each time.

    (7) Profit! (For the bank, of course.)

    You may think of your bank’s bill pay service as somewhat like when you buy a cashier’s check–i.e. your account is debited when you order the payment, or reasonably soon thereafter, and that the bank then pays your bills out of its own separate disbursement account. That may indeed be true for some or even most banks. But for others, the bill payment tool is nothing more than a check-writing service. It saves you the expense of stamps and the writer’s cramp associated with filling out checks by hand, but that’s it! Like a paper check, you have to wait as much as a week or more for these “online” bill payments to clear your account! This may even be true if your bank claims to pay a particular payee by ETF.

  2. Joan Licano says:

    I’m still learning from you, as I’m improving myself. I certainly enjoy reading everything that is posted on your blog.Keep the stories coming. I loved it!

  3. Tammy Bagwell says:

    As a single mom with no financial support, my bank account can get low. I remember the first time of many many where I had balanced my account and the order of when I paid a bill, I would have over drafted. I paid one year at least $2000 in OD fees. It became a dominoe effect that I could not get out of. I finally took money out of my 401k to help me recoup and get a fresh start. I’m now in a difficult situation again and they intentionally have not processe 2 small debit card transactions that have been sitting in my account for 2 days and my balance is at 5.00. They are hoping I overdraft so they can charge me three $35 fees instead of one. So frustrating and there should be laws instituted to protect consumers.

  4. Lamar says:

    I had -$18.08 in my account; I deposited $20 (at 11:05PM) to make it $1.92. Chase policy is 11:00PM EST. The next day I got hit with the NSF Fee($34.00) and now I’m negative. Why did it show positive and then after I got hit with the NSF Fee being only 5 min. late.

  5. FreeloaderFred says:

    There are good, fair banks. They are not among the largest five. Shop around and change your accounts. When you find a fair and understanding bank, stick with it and tell a LOT of other people.
    Get a money tracker such as Quicken. You can track your balance, prevent errors and put the lid on fraudulent charges.

  6. Stephanie Chambers says:

    Wells Fargo is not the bank to go with if you plan to minimize overdraft fees. It is their job to continue to charge you, manipulate your transactions and selectively post transactions in efforts to gain and overdraft fee whenever necessary.

  7. Cheryl says:

    My issue with boa is that I notice my charges are shifting in favor of an overdraft fee. I have been charged a $35 fee for being 6 cents in the negative. Really? How is 6 cents a $35 inconvenience??? I have seen charges shift in my account too which I do not understand. I do not remember banking being this way until the digital age. Automated systems are making it easier to rip of a consumer.

  8. Gregory D Lisk says:

    I have been getting NSF fees on a regular basis for 2 years now and I just cannot continue this way……. Whenever they can they kick me when I am down…… I will notice that I don’t have enough $ in my account for a check that could come in….,. I promptly send an email informing them of my possible problem and that I will be in that day to make a deposit…… I make the deposit as I said I would , the item comes in in the meantime and I get hit with a $35 fee…… So for a $3-$5 over draft that was negative for less than 6 hours results in me receiving $35 fee….. $175 in the last week……. One time I had $29.32 in my account…… The week prior to me noticing my low balance I had scheduled 3 Capital One credit card payments with the 2nd one hitting the next day along with a check for $26,??…… I emailed my local bank (of over 25 years) and informed them I would be in the next day to make a deposit to cover both transactions….. Igot stuck at work and was not able to make a deposit…… I did get it in the following morning… So that day the Capital One came in for $64.?? and the check for $26.??….. She returned the Capital One and cherged me $35…… She paid the $26.?? and charged me $35……. Then,,,, the morning I got the deposit in I was charged $35 for having a ‘sustained negative balance’….. If she is returning the Capital One and not paying it then I still have $29.32 in my account…. Which is enough to cover ther $26.?? check….. Why do I receive a fee form the check too? I have $29.32 in my account…… Because Capital One wasn’t paid….. I emailed all of this to my Bank and explained I felt there was an error…… She emailed back and merely said: ‘there is no error.’ How is that possible? I am in constant communication with my bank via email and have felt a ‘banking relationship’ with them at times….. But it has turned dysfunctional at best…… At my wits end…… $175 in the last week….. Over 18.4% of my net pay…,…. Can’t continue….. Please Help!!!! Chemung Canal Trust Company is my bank…..

    • J'Marinde says:

      Mr. Lisk;
      Do you have a Wings or other credit union in your area. I would suggest changing banks, despite your long time relationship with them. They don’t deserve your business. A fresh start may be in order by now. Another option is to find out who the Board of Directors are and appeal them. It may help, it may not, but at least you are informing yourself as you go along. I am so sorry this is being done to you.
      Also, Elizabeth Warren set up the CFPB (Consume Finance Protection Bureau) and, although I cannot say my contacts with them were any help, I only encountered smuggery and snooty attitudes and no help – – it might help if you contacted her office and told her what is happening to you. My most solid suggestion is finding out who the bank officers are, or who them board member are and contacting them on their own – – not through this person who will only argue “her” case first and likely prejudice their outlook. Once you know the name of someone, call the bank and ask for them by name – -do not say you want to talk to “the bank president,” etc. as you wil likely be deflected to someone of no help. If they are not available, ask for their assistant; do not say “secretary,” as current convention is to call them “assistants” and they like that. You must be strategic in pursuing this. I so wish you well. I keep wondering why no one is doing anything about these errant banks – – then I look at those in power and those wanting to be in power. . . ‘Something to think about. Good luck to you. I wish you the best.

  9. Russell Alexander says:

    PNC bank is currently ruining my life and causing me to not be able to pay my bills. My wife was sick in the hospital with Pneumonia so we missed an entire pay period which caused us to have no choice but to overdraw the account to pay for medication. We begged and pleaded for them to at least reduce some of the charges but they refused. We live paycheck to paycheck and need every dime to scrape by. Fast forward four months, We have paid thousands of dollars in overdraft fees and still can not keep our bank above $0. Now PNC bank is randomly refusing to pay our bills we have setup and is immediately taking the money back. I just found out that they took back two months of payment to our Auto insurance company and we just received a letter of cancellation sent to us and the state as a direct result. Now their actions MUST be illegal as they are completely devastating my life and way of living practically forcing me into bankruptcy. Has anybody ever experienced anything like this and is there anything that can be done legally? By the way when the money goes back in they immediately take it for more overdraft fees.

    • J'Marinde says:

      Mr. Alexander;
      This is devastating and no one, no bank, business or institution, should be able to do this to anyone. All I can think of is to tell you some immediate survival tactics and hope they are a bit of help. Having been there so many times in my life as a disabled, and now senior and retired, single mother of two, my sympathies go out to you and your wife.
      First off – stop the flow of money to that account and get it in cash or a check directly to you. Shut down all your auto-pay accounts, so the bank has no more reason to charge you overdrafts or any immediate way capture your funds.

      Get money orders and pay your bills yourself and, if appropriate, explaining in a letter to your creditors what has happened – – Not about the overdrafts, bank issues, etc., but simply that your wife became ill and the medical costs are interfering with your ability to pay things the way you usually do. Tell them how you plan to pay them for now – – or ask for some leeway in doing so. Let them know you are willing to work with them, AND that you are in most dire circumstances. Put EVERYTHING in writing. If some creditor becomes vile and begins hounding you, write to them and tell them to never call you anymore and explain how you plan to manage this account – – even if that means paying $3, $5 , $10 or a little more over several years. As long as you are sending some amt on a regular basis and making a good-faith attempt to pay them you are likely free from future collection attempts. They may initially still try to humiliate or maintain the aura of “control” over you, now threatening that “if you don’t send them the amt you indicated every month by such and such date, they will come after you, etc.”, but ignore that and keep sending the amt you have deemed you could afford. Some of these people have real power complexes and do not like you taking back yours or asserting it.
      For a while, do everything in cash and/or money order. You need first of all to survive. Maybe get one of those free prepaid cards they advertise on TV and have you monies directed there, but cash and money orders are better. I believe the USPS sells these (money orders) for $1.00 each. Your most immediate concern after your wife’s medical needs is your shelter and food.

      Make it a “mental health” policy to never open bills on a weekend, so if you need to call someone you do not want to be fretting over that on weekend time- -you need a break too.

      I often dream of a coalition of helping–hand (Non-govt) originations for us all to help each other and allow us to avoid the smug, invasive, demanding, lying, judgmental, nasty and vile bureauCraps – – and as I am thinking this all over – – go to your local Salvation Army. They once helped me in a similar situation, even taking on and paying off several of my bills for me.

      If you need to, tuck in your pride and go to your local county/state social services and see if you can get some help. You’ve been paying taxes for a lot of years and you are certainly due some of that back by now. All those bureauCraps your taxes paid have been and are still living very well on it – – they need to give you some of it. (If you begin down this path, I have more information to offer.)

      Also, please get a copy of the book “STAYING SOLVENT.” The first paragraph was the most informative for me – – finally I could breathe, and a long easing sigh I did at the revelation there. (Amazon.com may even have it for $4.00 – – a penny and $3.99 shipping. ‘So worth the read.)

      Let yourself know that you are not alone in this situation. Too many of us are hurting from similar things, however, your creditors – – and especially your bank, are likely acting as if you are the only person who ever experienced such difficulties – – I, personally, believe that this is how they “extort” more money from you, by playing on your guilt and sense of shame at your situation. Don’t give them the pleasure of this nonsense.

      I have been in similar situations many times over the years, and I so wish I could offer you more. I wish you both well, a speedy recovery for your wife, and I hope things turn around for you both very soon. Be well and be good to yourselves – – and remember to BREATHE…

  10. Joel Arroyo says:

    Recently TD Bank change the way they process transactions. I am a customers that lives check by check. My work checks are direct deposit on fridays each week. I pay my car every other week and now I have incurred in more than 4 overdraft fees of 35. They said this change was because customers wanted it like that. What customers rich customers? I can’t not afford this and certainly I can’t not afford loosing $35 dollars just like that. The only reason why haven’t close my account is because I have to many payments linked to my account. I feel this NEW thing is not only afftecting me is affecting people like me and we are getting excesive overdrafts fees. We are being robbed without a gun for the little money we make.

  11. Joel Enriquez says:

    BB&T Banking overdraft fees racket is programmed to make customer make a mistake with available balance. Here’s what they do . They would inflate your balance of course u thinking that u still have money because all transaction seems to be up to date.But as soon as I make a withdrawal or debit purchase they would remove that extra money if their calculations would put u in negative balance. Very deceptive tactics.I will start a lawsuit with this bank.or post it on change.org

  12. Philip says:

    Wells Fargo has an unfair overdraft policy they charged me US$35.00 x 5 =$175 in overdraft fees in less than 2 weeks called to see if fees could be waived but I could clearly hear they were not on the same page as I the consumer. I can clearly observe that these overdraft fees are to keep the rich richer and the poor in misery. Why is it mostly lower income individuals and minorities who get most always billed with more overdraft fees than higher income individuals and Whites?? Why is it that the overdraft fees can not be let’s say $5? When will banks like Wells Fargo stop abusing this practice? Who benefits from the poor and minorities ? Where can you find a bank that is a straight shooter you know honest and loyal to the customer?? This quote describes Wells Fargo policy (“ask me no questions and ill tell you no lies”.)

    • Stephanie Chambers says:

      Wells Fargo intentionally batches transactions in efforts to provide you with a deceptive view of your account balance. If you are a customer who frequently uses your debit card for transactions like they encourage, they intentionally prolong processing those transactions. The minute you incur an overdraft processing fee all of a sudden every last transaction reappears!

  13. J'Marinde says:

    I would like to know why merchants can “authorize” for more than they are going to be charging you , and then, if you have enough money for the actual charge but not the total authorization, your purchase is denied. They clam this is “to be sure you can cover the cost of your purchase,” but that does not make sense. If the authorization for the correct amount goes through,then you obviously have enough money to cover it. I think this “mining” of our personal information should be outlawed and considered illegal. I think it is purely about snooping into our personal finances.

  14. Valerie Wilson says:

    I bank with Mutual Savings Credit Union. I was charged an NSG fee of $35 twice for a direct debit for my insurance. I guess the company reruns checks twice trying to get the money which caused me $70 worth of overdraft fees. But, the problem I have with the credit union is if you don’t bring the account current in 5-7 days they charge you $5 a day until brought current or charged off. I really don’t see how a bank can charge $5 dollars a day on top of the $35 dollar overdraft fees that was charged. Can someone help me to understand this cause quite frankly I think it’s a rip off… And, if the Credit Unions cab do this, why the big banks not doing it because it’s all about making more money.

  15. Jerry says:

    US Bank has charged me $36 over 10 times this month alone. They seem to delay deposits and make withdraws in order to purposely overdraw my account.

  16. T.R.B. says:

    Comerica bank has charged me over $1,000.00 in the last 18 months. Several charges have been because I was overdrawn by .75 cents or less.

  17. T.R.B. says:

    Comerica bank has charged me over$1,000.00 in the last 18 months. Several changes have been because I eds overdrawn by .75 cents or less.

  18. Fred Sheeman says:

    Overdrafts?
    If your bank is mistreating you, LEAVE!
    Stay away from predatory financial institutions – including the “Big Four”
    Most honest banks will “forgive” accidental overdrafts if you haven’t done this in six months. Otherwise, they may well work out a repayment plan to help avoid overdraft caused overdrafts.
    Overdraft protection? Well, if you are careful (use a tracking program such as Quicken), then you will find that as a costly way to avoid getting “stuck”.
    Quicken has saved me and my bank a lot of money due to hackers and my own failures to add and subtract correctly.

  19. Juan Guillen says:

    Comerica is literally taking my entire months check which this month was a little under 8k all because of overdraft fees based on purchases made through a PayPal debit card which was backed up by my Comerica bank account. These are very small purchases gone insanely wrong and since they were made by my wife without me knowing well i didnt even see it coming. Somehow PayPal and Conerica turned a -$65 balance into a -$652 balance from 3 days time of multiple transfer attempts to PayPal by Paypal which is causing me to lose my entire check (before getting to pay rent or bills) and basically can lead to losing my home on top of being completely broke for the month because it seems like Comerica Bank is charging us a $3,500 fee on top of the $3,800 fee for only they know what. I cant even speak to anyone until Monday so i really hope this is some kind of mistake or else my family is going to end up homeless because of these money hungry dispicable people they call bankers. Ill try and repost once i know what is going to happen.

  20. Christina says:

    TD Bank os outrageous!!! My life was altered having to go on permanent disability for 10 years beginning at the age of 23 years old. Through many challenges, I healed and strengthed myself, and in November 2014 received the re-evaluation letter from SSD that my disability benefits would end January 2015, as well as medical benefits. Since February 2015, my supplemental real estate income has been inconsistant, while seeking permanent employment. I am now earning a weekly paycheck, however for the last year since February 2015, I have been drained of unfair bank fees from TD Bank. Last month, after explaining my circumstances to a call center manager, she advised me of a type of account that charges $8.00 per month for maintenance fees insteand of $15.00. However being charged multiple $35.00 fees in one week creates a spiral effect. After begging and pleading, bank representatives are trained to unempathetically refuse to refund fees. This is aweful treatment to people who are trying bounce back from a life of being on disability and be normal all within 12 months. Is there protection within the American Disability Act against banking?

  21. Ann says:

    I had 4 overdraft fees charged in 2 days, so I finally got my check and raced to pay it just to give them my check to be put on ‘hold’ for 5 (!) days, while I was waiting for it to clear I got hit with 2 more overdraft fees !!! Wtf I’m asking , and that is after I asked them multiple times if they are going to charge more any more so called fees!!! No was the answer, and yet they still did. This feels like a highway robbery. I’m closing my account I’m so done with Bank of America

  22. Warren R Weber says:

    I recently moved from PA to CO. While I was getting moved in FNBPA bought out Metro and my account turned over to them. I was planning on closing the account but it was a convenient way to send money temporarily. I had a membership fee, that I thought I had cancelled, come out. This caused a $5.00 (I am rounding off the figures)overdraft. Though I have an e-mail on file with them, they sent a letter to my old address. This was on the 15th of March. I received the letter on March 30 and immediately went to my Colorado bank to send them the money. Due to the time passing there were more late fees and I now owed them $90. I sent them a wire transfer because it would have taken a few more days to set up the internet transfer and yet more late fees would be added. Problem solved? No. They charged me an additional $18 for taking the wire transfer and charged me another $12 late fee. No notification on that one yet even though I’ve been getting e-mails from them since February. If I had not checked my online statement I would not have known about it until another letter comes in the mail. You cannot pay this in any quick and easy method. Not over the phone. Not over the net except by linking accounts and doing a transfer. This is set up so that they can add as many late fees and other charges as possible. I no sense of the word is this just. These suit wearing thieves are as despicable as any crackhead mugger.

  23. Emily says:

    I had my first hit with an overdraft fee. Usually I do a better job keeping track but I messed up this one time and the fee got me. I have over $2K in that account, in a different suffix, but because I was 31 cents short on a $60 bill, in checking, they charged me $32. My mess up but it seems excessive, especially since I had the money to back the check.

  24. Samantha Hoffman says:

    PNC bank has the most unfair overdraft charges it is terrible! They claim to give you overdraft protection and then don’t use it and then charge you 4 overddrafts! I am an angry customer! I called them and they credited me and I am so mad!

  25. Zebulon says:

    I will say that I am not a rich man, but rather poor. I do not expect a bank to be able to change that. However, Wells Fargo has done things that have finally made me switch to another bank.

    Wells Fargo has done the following to me:

    Badgered me to open account after account.

    Blocked bill payments (to CenturyLink, which was verified by CenturyLink that it was indeed Wells Fargo that put a stop to the charge despite having sufficient funds). The banker I spoke to about this was very nervous when I mentioned it.

    Failed to flag fraudulent charges on my account whilst telling me that it was me (as if they’d know).

    Charged an overdraft protection fee (which seems to be selective) that actually caused a second overdraft that will then incur an actual overdraft charge, which brings the total to a whopping $47.50 I have to make up. I am good with keeping my account in order, and though we do struggle financially, I have

  26. Chela says:

    I always write my check on the 5th of each month for my rent, i deposit 1000.00 on the 5 th but i gave my land lord the check early bit i wrote the 5 th on it, check my bank the check got posted on the 4th i had a overdraft fee and i thought it dont get clear till the 5th ,dont i have till 5 to deposit the money before i get charge a fee and why wouls they post it on the 4th if the check i wrote the 5th,please help is it right or im wrong?

    • Reese says:

      In my US Bank Deposit Account Agreement it allows depositing a check that is post-dated if the the post date is one day away. So since it posted on the 4th, written for the 5th, Id assume your landlord’s bank allows the same thing. So if you’d dated it for the 6th the earliest it could post would be the 5th.

  27. Jana says:

    Does US Bank have the right to continuously charge an overdraft fee ? Please email me back ASAP

  28. Diane Davis says:

    Wells Fargo routinely holds my directly deposit salary payments and then charges overdraft fees. This morning I checked my account and had money in my account, but by the afternoon, they made my direct deposit pending (it was shown in my bank account by 5 AM and was from Fulton County Government!) At 7:00 AM I had no overdraft, but at 5:00 PM they manipulated the account to show an overdraft. Are there any banks that do not do this?

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