A Customer's Look at How Banks Maximize Overdraft Fees
Wesabe's Marc Hedlund blogs about a post from a Wesabe member who describes his recent experience with overdraft fee policies at Wachovia Bank - they so irritated him that he's closed his checking account there. He says: "Wachovia was able to use these three methods (a) to create an "overdraft" where one didn't exist from a cash flow perspective by playing with timing; (b) manipulating the order of posting transactions to make those fees apply to four transactions instead of the two that may have been otherwise been overdrafts, assuming Wachovia's initial calculating based on transaction timing is proper; and (c) turning those four overdraft charges into seven by paying themselves overdraft fees before covering any other transaction, including those that come before there is any overdraft."
It's amazing how powerful communities using collaborative technologies like Wesabe are becoming.
Posted by: Jesse Robbins | May 01, 2007 at 01:46 PM
Most all banks do this. In fact, there are a number of software vendors that provide software to the banks that will manipulate postings to your checking account to maximize overdraft fees for the bank. For example if on a single day you post $200, $50, $25 and $30 checks and your balance is $180, the software will post the $200 first causing an overdraft on all four checks, even though they could post the other three checks first and then the $200 check to create only one overdraft.
Posted by: Randy Barker | June 18, 2007 at 06:54 AM
After being a loyal 20+ year customer at Wachovia, I closed all four of my accounts due to their practices. My "free" checking account was being charged outrageous fees because my savings account dipped below their standards, they'd place 10 day holds on my deposits, creating overdrafts where there were none. Their "fees" added up to much more than my debits. Complaining to them is a waste of time. They don't care. Maybe if enough people change banks, they'll start to care.
Posted by: Kim | August 21, 2007 at 08:22 AM
I agree with the comments about Wachovia Bank. I am a customer there and have run into their 'potential overdraft fees'. I would suggest canceling your account with them. If you happen to be one of the few that cannot relate right now, you will understand somewhere down the road. I think that someone should sue due to unfair business practices.
Posted by: Cherie Parker | August 21, 2007 at 08:44 AM