An online banking WTF that cost me
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So a certain, major, national, and well-respected bank has been fairly good for me. With few exceptions (one being that they require JavaScript for "security" reasons) the online service has been good. This month, though, I found an interesting issue.
We moved this month, and so for various reasons money was tight. I had to make sure that everything was timed right when it came to automatic bill payments and my direct deposit from work. I would get paid on the 25th and my car payment was set up to pay on the 25th as well.
When the 24th rolled around I found my checking account in the negative and $70 in overdraft fees on top of that (and another $35 the next day). Why? Because my car payment had been withdrawn on the 24th! I double-checked, and it was indeed set up to withdraw on the 25th, and every one before it had come out on the 25th. I called the customer service people, and got an interesting explanation.
When you set up automatic bill payment online with this bank, you can only choose the withdrawal date. The problem is, though, that the online system then calculates what 5 business days from that first withdrawal date is, and then sets the [i]due[/i] date of that payment accordingly. Then, the due date is what is used to determine when the withdrawal happens. Even after this, you can still only change the withdrawal date, and the way it works is never explained. Every other month since setting it up had been fine, except for this one where there was a holiday that meant they needed to move the withdrawal date back a day!
Is that a major UI WTF or what?! I think the failure of their UI counts as a "bank error..."
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Is there a compelling reason you're keeping the name of this bank a secret? Do you feel as if you owe them something?
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Indeed, it would be useful to know which bank is crap like that, we don't want to end up being one of their customers!
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Similar thing happened to me when my bank changed ownership. I had automatic bill pay set up with the dates my checks would mail. After the ownership change, the existing dates stayed the same - until I made an edit. Although I did not change the date (only the amount), the update apparently changed the date from "date mailed" to "date recipient will have check in hand".
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@SamuelDr said:
Indeed, it would be useful to know which bank is crap like that, we don't want to end up being one of their customers!
Sounds alot like Bank of America. It's happened to me a couple times, but luckily never resulted in over-draft fees. It did leave me with $10 for a week of food/gas due to my rent check money being "held" unlike the 23 other times I did it.
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Here in the UK banks are being hauled over the coals (a british phrase? it means having their actions seriously questioned) over fees for unauthorised overdrafts - it can be 30GBP per item taken just days after you go over, but your bank sounds even worse, taking fees on the same day if I read correctly!
I got caught out by this payment thing once or twice - I feel sorry for banks developers who must be constantly work around WTFs like this.
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Regarding UK vs. US.... it is standard practise in the US to charge an overdraft fee per item on the day of the item. Some banks also charge sustained overdraft fees for each day you have a negative balance.
However, most banks don't do the sustained overdraft, and for the regular overdraft fee, at a typical rate of USD 30.00, it is about half of the GBP 30.00 you mention.
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Bah. Barclays (UK) had the nerve to send me a letter about a year ago. Bear in mind that I have been with them for over a decade, never once causing them any problems or going into a negative.
In essence, the informed me that I had gone into an overdraft of less than £10 for all of about 30 minutes or so due to a quirk in the timing of ins and outs... Because they were soooo nice though, and I was such a "valued" customer, they would be charging me for neither the overdraft nor the letter informing me of the overdraft - this time - but next time I would be charged! Hey thanks for that, I love you too.
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It was BB&T, by the way.
Also, most US banks process debits cumulatively at the end of each day in order from greatest-to-least. This means that the larger sums get taken out first, and then if that leaves you with a negative balance you get hit for an overdraft fee ($35) for every little transaction afterwards (be it $5, $10, or $50). That way, you get tons of individual overdraft fees, whereas if they processed it the other way around and did the big transactions last you would probably only get one overdraft fee.
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<FONT face="Times New Roman" size=3>To me the real WTF here is the fact that the bank doesn't offer a 'floating loan' to your checking account to avoid these types of overdraft problems. I have a $500 floating loan that in the rare event I overdraft I don't get charged with an overdraft fee. I am with a Credit Union though, Banks are primarily in it for business owners and don't really care if the screw the little guy with millions of little fees.</FONT>
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@djork said:
It was BB&T, by the way.
Also, most US banks process debits cumulatively at the end of each day in order from greatest-to-least. This means that the larger sums get taken out first, and then if that leaves you with a negative balance you get hit for an overdraft fee ($35) for every little transaction afterwards (be it $5, $10, or $50). That way, you get tons of individual overdraft fees, whereas if they processed it the other way around and did the big transactions last you would probably only get one overdraft fee.
Safe to assume they process the credits at the end of the day as well (after the debits of course)?
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I have a mini-WTF about my bank as well. I use Washington Mutual, as well as several other banks, and WaMu is the ONLY one that doesn't post credit card transactions immediately - in fact, it can take a week for them to show up.
Not really a bad thing I suppose, except when you never keep a register because you're just used to your bank automatically posting your CC transactions right away.
Not only that, but WaMu will be more then happy to let me take out money I don't have. Case in point? I had 3$ in checking, automatic debit goes through for $400, and WaMu happily lets it. Of course they tack on a $35 overdraft fee as well.
Was talking to a buddy about it, and he said a lot of banks are starting to do things like this - turns out that while they have to report money earned from interest and investments, they don't have to report money earned via fees =\
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@versatilia said:
Here in the UK banks are being hauled over the coals (a british phrase? it means having their actions seriously questioned) over fees for unauthorised overdrafts - it can be 30GBP per item taken just days after you go over, but your bank sounds even worse, taking fees on the same day if I read correctly!
I got caught out by this payment thing once or twice - I feel sorry for banks developers who must be constantly work around WTFs like this.
Off-topic, but "hauled over the coals" sounds like the British equivalent of the American phrase "raked over the coals". There's a neat blog that details these kinds of linguistic differences, if you're interested:
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My bills always come with a "Save a stamp! Set up automatic payments!" flyer.
I always resist the temptation.
This is one reason.
Another is that it's hard enough to cancel a service even when you write the checks yourself. When your bank won't stop paying them for what you don't want, you're stuck.
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I've been reading this thread for a while, and I need a clarification: what exactly is overdraft? Going into negative balance on account, or going over the negative limit on your account?
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@ender said:
I've been reading this thread for a while, and I need a clarification: what exactly is overdraft? Going into negative balance on account, or going over the negative limit on your account?
Overdraft is where your account goes negative. Typically banks offer what they term "overdraft protection" and have a limit on the amount you're able to go negative.
Luckily, my bank doesn't charge overdraft fees unless I use it more than a few times each month.
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Yet another reason why I don't use automatic billpay. Exactly how much time are you saving? If it's an online payment anyway, you log into the website and click-click-click, tadaa you're done. Unless you have a nice buffer in your account such that going negative isn't a possibility, I think it's just dangerous because the timing could get screwed up.
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@ender said:
I've been reading this thread for a while, and I need a clarification: what exactly is overdraft? Going into negative balance on account, or going over the negative limit on your account?
<UK>
An (authorised) overdraft is the amount by which the bank allows you to go below £0 (usually) without charging you any kind of fee, but while charging you (a usually high rate of) interest.
An unauthorised overdraft has typically two meanings, both are similar:
1) it is the amount by which they will allow your balance to go below the (authorised) overdraft, while still honoring requests for payment.
2) the state of your account if it's in excess of the (authorised) overdraft, regardless of whether requests for payment are honored by the bank or not.
Both meanings include the fact that the bank will typically charge a 'fee' (note scare quotes) for any (and each) sort of transaction that (actually does|attempts to) increase the unauthorised overdraft.
</UK>
Of course, the 'fee' is making the banks a lot of money, and some are of the opinion that the fee is excessive - by contract law, it must represent any costs to the bank in processing the request (of a payment request on a 'delinquent' account...) - specifically, the amount is not to be punative in nature.
The Office of Fair Trading (government department with no teeth) decided a while back that £35 was too much (per request) and that £12 was more realistic, and that any institution (banks, credit cards) charging more than £12 without good reason would get a very severe looking at.
The 'real' figure being mooted, by Tom Brennan, at the moment is £2.50 per request, and every time the banks are being taken to court by their customers to reclaim these charges, (bar 2 unusual cases,) they've dragged it out to the last minute and eventually paid before it came to a precedent setting adjudication.
Tom Brennan, however, is trying to force a legal precedent by dragging one of the banks to court and trying to force them through the legal process to get a decision by a judge. At the moment it's at the stage where the two sides are arguing their cases for whether or not such a trial should even take place....
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@un.sined said:
Overdraft is where your account goes negative. Typically banks offer what they term "overdraft protection" and have a limit on the amount you're able to go negative.
Interesting, my bank allows me to overdraft my account by up to 420€, and the only result is some negative interest at the end of the month. During high school, I was pretty much all the time in negative (but back then I was only allowed to overdraft by approximately 40€).
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@ender said:
@un.sined said:
Overdraft is where your account goes negative. Typically banks offer what they term "overdraft protection" and have a limit on the amount you're able to go negative.
Interesting, my bank allows me to overdraft my account by up to 420€, and the only result is some negative interest at the end of the month. During high school, I was pretty much all the time in negative (but back then I was only allowed to overdraft by approximately 40€).
My bank is the same - at least, one of them is. Allow me to point to ING Direct; they have an electronic checking account that earns 4%, and mine came with a $165 Overdraft Line of Credit. (I have referral codes for the 4.5% savings account that'll give you $25 and me $10 when you deposit $250 for 2 weeks, if anyone's interested). They don't give you a checkbook, though.My Wachovia account, for all its other faults (.3%ish on savings? ow!) is linked to my credit card with some "overdraft protection" fun.
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Yeah, Washington Mutual is quite the oddity. So far, I don't think there's really a limit on just how negative I can go. You'd think if you had $40 in an account, and tried to withdraw $100 from an ATM, that they'd say 'Not happening'. Not with WaMu, they gladly let you do it, then charge you $35.
Hell, I was able to charge $2,300 last week, because I had assumed a check went in, and it hadn't - it went in a day later. Interesting, eh?
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