[kenrexford]

I hate banks.

Here's something I just found out, as to how they screw the little guy.

Having two accounts, I transferred money from one account to another account by writing a check from the one account to the other account and depositing it in the ATM, on Friday, at 5:00.

Because this was after 2:00, it was treated as placed in the ATM on the next business day.

Saturday, they were in business, but that it not considered a "business day," even though they are open on Saturday and actually get the check that morning.

Sunday is not a business day.

Monday (this was a while ago) was a holiday, so that's not a business day either.

So, the ATM bank had this as deposited on Tuesday. The other bank withdrew the money from the first account on Tuesday.

However, that same bank did not recognize the deposit check until Wednesday, a full day after the recognized it for withdrawal purposes.

On Wednesday, then, the "wait two days" started. In other words, the money would not be available to actually use until midnight Friday (Saturday morning). They needed these two days to make sure that my check was good, even though they themselves have the other account also and already withdrew the money.

But, it gets better. On the Monday after this second friday, three days after the money would be available, an automatic bill pay would be made. However, the bank looks back two days to "flag" the money in advance of the actual payment. That two-day flag-back is business days.

So, on Thursday, four days before the automatic transaction, I had the money for that transaction and for other stuff. However, some of that money was not "available" until Friday midnight, which is well in advance of the Monday transaction also. However, because of the flag and the delay, the amount "available" on Thursday was less than needed for all Thursday transaction.

Of course, on Thursday, four out of five were covered even with this screwy math. But, if you take the big one first, then only one is covered.

So, with over $100,000 in the one account and plenty to cover everything AND SOME in the other account, I end up with four overdraft charges. That still leaves me a positive balance.

So, you can get multiple overdraft charges but end up with a positive balance, all because of strange delays coupled with strange backwards flagging principles.

But, it gets better. If you charge $5 for gas, they might flag $105 to cover the $5.

Bottom line? It seems to me that you must deposit enough cash directly into your account to cover all bills that you might pay for an entire month. Then, you have an effective $0 balance to work with. Each additional $1 of deposit allows you to spend $1, but you must also have about $100 per transaction just in case they "flag" more than you spend.

Damnable bastards, all of them!!!

[jdonn]

kenrexford, on Feb 5 2009, 02:53 PM, said:

Bottom line?  It seems to me that you must deposit enough cash directly into your account to cover all bills that you might pay for an entire month.  Then, you have an effective $0 balance to work with.  Each additional $1 of deposit allows you to spend $1, but you must also have about $100 per transaction just in case they "flag" more than you spend.

Any time I have ever wanted to deposit a check I have cashed it first, then deposited the cash. At my bank that makes it show up that day. They have given me funny looks but I can live with that.

I'll bet if you throw a fit you can get the charges waived. In particular it's totally ridiculous that the same bank didn't recognize the deposit until Wednesday even though it recognized the withdrawal Tuesday.

By the way,

Quote

over $100,000 in the one account and plenty to cover everything AND SOME in the other account

is not the little guy!

[jtfanclub]

It can be worse than that. One bank I use takes two business days to process CASH. As in, if I go in on Friday at 2:00 and give them a $100 bill to put into my account, and there's a holiday on Monday, the money might actually show up in my account on Wednesday. If I'm lucky. What could they possibly be doing in all that time?

I'm a regular depositor there. It frequently takes them a week to process my local paycheck. Which they get automatically every two weeks, always the same amount. Again, makes no sense whatsoever.

[neilkaz]

Ken, it sounds like your are getting superscrewed here by typical bank BS.

Four overdraft charges, WTH...how long have you been doing business at that bank ?

What I'd do is to march into that bank, speak to the manager and explain what happened and ask for those charges to be reversed. If he/she won't do that, then you tell him/her that you are closing all accounts immediately. As long as you have a decent ammount of cash in that back and for a while, this almost certainly works.

.. neilkaz ..

[Winstonm]

You needed a HELOC to guarantee the cash in your account was real - Oh, wait, no one is loaning anymore.

Never mind.

[blackshoe]

My uncle used to own two banks. Some twenty years ago, we got into a discussion of "overdraft charges" which I think had recently gone up at my bank to $10. My uncle said "you know how much it costs the bank to process that overdraft? Seventy nine cents. The rest is 'penalties'".

I am beginning to think that the right way to deal with banks is to withdraw all cash at the first available opportunity and stick it under the mattress.

[kenrexford]

Actually, it is quite worse than I even set out.

First, though, the $100,000 in the other account was from an IOLTA account, meaning trust money from a settlement. So, I am still a little guy.

But, back to the main issue. How bad was this? The 4 OD's caused a deplation that kicked in another round two days later. Then another, then another. In about 48 hours, the account incurred 10 OD's for a net of about $330 in OD charges. (Wife in charge!) After a full $330 in OD charges, we STILL had a positive balance.

I have never heard of $330 worth of OD charges, to end up with a positive balance in the account. But, they walked me through the nonesense accounting BS and showed how this happened, all because of precise timing of "availability" versus "pre-authorizations."

I have been with this bank for 32 years, BTW. But, they just got bought by someone, and then this nonsense hit.

I also would use the "cash the check, deposit the cash" approach, except that in THIS bank, there is no local branch. This sounds weird, but there is a reason. We also have a local bank, but the IOLTA is with the old. We could change banks completely, and we may. But, nonetheless I thought that this silly methodology should be made known.

I mean, even if you deposit cash on Friday, recognized on Friday, you could get an OD because of a gas purchase Thursday night that exceeds the amount left on Thursday night after flagging a pre-authorized payment for the following Monday.

[PassedOut]

neilkaz, on Feb 5 2009, 03:11 PM, said:

What I'd do is to march into that bank, speak to the manager and explain what happened and ask for those charges to be reversed. If he/she won't do that, then you tell him/her that you are closing all accounts immediately. As long as you have a decent ammount of cash in that back and for a while, this almost certainly works.

This approach worked for me.

The situation is infuriating! Hate that you are having to deal with it.

[kfay]

This crap happens to me with my bank all the time. Well not so much anymore but when I was a student I must have been overdrafted once a week when I really had the funds much in the way you described.

A few times I was able to go in and yell at them and get the ODs waived. But I totally know what you're talking about and it really made me irate on several occasions.

[jdonn]

kenrexford, on Feb 5 2009, 04:32 PM, said:

First, though, the $100,000 in the other account was from an IOLTA account, meaning trust money from a settlement. So, I am still a little guy.

Lawyers....

[JLOL]

Im sure you know this but they will definitely remove the OD charges if you just talk to the manager. Still that whole story actually tilted me, i mean...wow

[helene_t]

This "flagging" thing is (at least partly) a way to charge for transactions. Instead of saying 0.02% they say "two days' interests". I would prefer less cryptic rates but I can live with it.

[Echognome]

helene_t, on Feb 5 2009, 03:16 PM, said:

This "flagging" thing is (at least partly) a way to charge for transactions. Instead of saying 0.02% they say "two days' interests". I would prefer less cryptic rates but I can live with it.

I agree with your interpretation, but then I'd much rather have them charge me directly the 0.02% interest, than have to pay OD charges when the money arrives in that window. In essense, I have to pay the 0.02% anyway, but the way this is set up, I also have to pay OD charges when the money isn't there two days ahead of time.

I'm sure the banks will tell you that this verification is needed in order to ensure the money is there, I just find that amount of time is a bit ridiculous.

[helene_t]

Echognome, on Feb 6 2009, 12:35 AM, said:

I agree with your interpretation, but then I'd much rather have them charge me directly the 0.02% interest, than have to pay OD charges when the money arrives in that window. In essense, I have to pay the 0.02% anyway, but the way this is set up, I also have to pay OD charges when the money isn't there two days ahead of time.

Yes, the OD is unfair in this case. Danish banks make a distinction between the "transaction date" and the "interest date" of a transaction. Say I received the money yesterday but they charge me one day's of interests then I will not get interests of the last 24 hours as the "interest date" is today, but I could pay a bill yesterday evening without being charged for OD. That is a fair (IMHO) system although of course a 0.02% or whatever rate would be less cryptic.

[blackshoe]

"Money" is mostly electrons these days. For our purposes here on Earth, the speed of electronic transmission, i.e, the speed of light, is roughly infinite.

IIRC, the way it works (in the US) is that on Monday, you go into your local bank, and present them with a check drawn on some other bank. The teller enters this transaction into the bank's computer. That night, after working hours, the data are sent to your bank's servicing Federal Reserve Bank. The Federal Reserve Bank credits your bank with the amount of the deposit. Then it sends the data to the other bank's servicing FRB. That FRB debits the other bank. This is all done Monday night. Tuesday night, the other bank tells its servicing FRB whether the person who wrote the check actually had enough money in his account to cover it, that FRB passes the info to your bank's FRB, which passes it to your bank. So by Wednesday morning, your bank knows whether the check you deposited was good. If my recollection is correct, then it seems like theft to me for your bank to screw around with your money any longer than 48 hours.

In theory, if the computers are up and running 24/7, all of this could be — and should be, IMO — roughly instantaneous. I strongly suspect that the whole thing is just a ploy to extract more money for the bank out of its customers' holdings.

[kenberg]

Give that guy in South Dakota a call for advice. He don't hardly ever have problems with his finances. He has some free time now so he will probably talk to you.

[Fluffy]

I have 2 accounts in teh same bank, I wanted to transfer 4000€ from one to the other.


-We will charge you 16€ (0.4%) for the transaction
-No way. What do you charge me if I get the money out and then in?
-Nothing.
-Then I will do that.
-Fine....

-There was a problem I didn't cancel the transfer in time, your are charged 4016€ in the other account
-What??
-Oh nevermind, I will just remove the transfer charge and everything will be fine.


and I though, if this was all so fucking easy, why did I had to wait 30 minutes for this stupid transaction?

[Phil]

Holding a check by a bank is a serious LOL.

I've even had banks try to hold cashier's checks from other banks. Try explaining to BOFA that a Cashier's Check from Wells Fargo will probably clear.

When interest rates creep up in the next few years, watch banks really try to play hold the check just to sit on the float.

[Winstonm]

Regardless. You wrote it up really well - I think you have some genuine writing talent, Ken.

[matmat]

ah... the problems of people who actually have money...