Bank of America To Drop Overdraft Fees On Credit Cards, Expected To Lose Millions
You'd think this was common sense, right? An ATM shouldn't give you money you don't actually have, and you shouldn't be able to use your debit card when you don't have enough money in the account to cover it. Now even Bank of America admits it, and has decided to take the lead as the good guy. (Although I don't think this is completely altruistic. If memory serves me, there's already a class action suit out there over this - even though it's not mentioned in the story.)
In a move that could bring an end to the $40 cup of coffee, Bank of America said on Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.
Bank officials said that effective this summer, customers who try to make purchases with their debit cards without enough money in their checking accounts will simply be declined. Debit purchases account for roughly 60 percent of overdrafts at Bank of America, the nation’s largest issuer of debit cards.
Banks are bracing for a new federal rule that will require them to get permission from account holders before providing overdraft services for debit purchases and A.T.M. withdrawals. That change was already expected to wipe out billions of dollars in overdraft revenue for the banks.
“What our customers kept telling me is ‘just don’t let me spend money that I don’t have,’" said Susan Faulkner, the bank’s deposit and card product executive, who said the overdraft changes were part of a broader push to build trust among its customers. “We wanted to help them avoid those unexpected overdraft fees.”
... it's less about fiscal responsibility and more about the consumer's implied agreement to any fees/penalties assessed for the 'convenience' of overdraft protection.
http://www.clossonsettlement.com/
“Why would anyone with a functioning brain believe this guy?”
Some guy with an eating disorder
I don't know if I should call and thank them or chew their ass for all the years they we're dicks. You go over by 5 cents and they nail you for $38.00 bucks when all along they had the power to deny the transaction and then act like it was your fault for not having the money which they gladly let you have for an additional $38.00.
FU BofA!
Goodnight, Frau Blücher
If you are over your limit. It won't let you take any money, they are really good about that. Then they charge you for being over your credit limit. Now use a debit card to withdraw more money than you have in your account. You can do it...all day long and each time they hit you with an overdraft fee, and also demand that you cover the money withdrawn at an exorbitant interest rate. That IS common sense. Common sense for banks and one reason I refuse to support them.
Barack Obama: Change we can only imagine
but many banks process your biggest checks first, so they can charge an overdraft on all the little transactions.
From their twisted, greedy point of view.
Barack Obama: Change we can only imagine
BigDaddy is absolutely right. It happened to me once and when I asked the bank about it they told me straight up that's exactly what they do.
In fact, if you have several checks hit the bank and deposits on the same night at midnight, they do it in this order:
Largest to smallest checks get debited first.
Deposits go in last.
So even if ALL the checks would have been covered, they will over-draw your account to the point where your deposit is nullified and you end up with a negative balance.
I think some of that is now outlawed. I make it a point to balance my checking with every transaction and know what I have to the penny. I never withdraw against pending deposits - particularly personal checks I've deposited.
No more over-drafts. I really hate banks and find them to be a necessary evil but I don't want to give them anything I don't have to.
their procedure is to snail-mail you a notice the day after it happens, ensuring that you rack up as many additional charges as they can get.
Advice too - ALWAYS fight it, preferably face to face with the manager. Quite often they'll reverse at least some of the charges. They know it's not reasonable.
I've given up on credit cards years ago and only carry debit cards, i've occasionaly made errors and requested more cash from an ATM than i actually had and was never allowed to take more than i had.
In what world can you do that? I might've done it on purpose then!!
ATMs won't give you cash because you could just walk away from the account. The VISA or MASTERCARD logo is a guarantee that merchants will get paid for the sale. Gotta keep the economy spinning!
"...Now use a debit card to withdraw more money than you have in your account. You can do it...all day long..."
in the past 6 or 7 years and have had my account emptied out. It was a real hassle and the bank eventually put my money back in - but that was Wells Fargo. Good luck if you bank at BofA and that happened.
I don't even use a debit card anymore - I don't even have one. Everything's paid in cash (and what a pain in the as* that is).
guaranteed one of the hooks they will use is the "check card" identity, they can still charge overdraft fees on check purchases, becareful if your base acount is a checking account
probably need to be careful of automatic withdrawals and online bill paying too. they'll all be exempted in some way
The blue and gold in Visa's logo were originally chosen to represent the blue sky and golden-colored hills of California, where the legacy Bank of America was founded.
-----------------------------------------------------------------------
Wed, 03/10/2010 - 07:26 — Truth_Critic
Just look at BOA's wiki and then VISA...
"In mid-September 1958, Bank of America launched its pioneering BankAmericard credit card program in Fresno, California with an initial mailing of 60,000 unsolicited credit cards**."
----------------------------------------------------------------------
Bank of America's history dates to 1904, when Amadeo Giannini founded the Bank of Italy in San Francisco
Amended: **YOU'VE GOT MAIL!
Study the symptoms not the virus...
What i said is based on my experience in 2003, the last time I had a bank account.
Barack Obama: Change we can only imagine
BoA is the worse bank in america. They would not be the 1st to do this unless they have some plan to scam people out of equal or more money
I agree. I read the story at work last night and the first thing I wondered is how they're going to make up all that lost revenue.
I have a friend who simply refuses to deal with banks. She takes her paycheck to Walmart and puts it all on a card. It cost virtually nothing one you have the card and she can use it like any other card. When the money's gone, it's gone. No way to overdraw.
No better than banks. None.
Barack Obama: Change we can only imagine
I don't think she cares.
I hope my last reply didn't sound snippy. She got screwed by banks because they would allow her to overdraw her debit card and that's why she does the walmart thing. I meant she doesn't care because she's not making a political statement. She has limited means and is trying to make her money go as far as possible.
is all on a WalMart card, right? She can only spend it at a Sam's or WalMart?
Until you respect the citizenship of those with which you disagree, you're not a true American.
Walmart like many stores sells instant debit cards that what CafeenMan is most likely talking about. There Visa(or another major company) backed cards where you givea large sum in cash or check to walmart or other store and they put all but 3%(depends on the fee) or so on the card and you can treat it like a reguler debit card.
She told me there is no fee after you initially buy the card. And it works like any other debit card. Not sure of all the details but she made it sound like it's pretty much free after you buy it. I think you have to put at least $100 when you recharge it to not get a fee.
You can buy these at the registers with all the other cards hanging there. I was tempted to get one for a special use, and it looks like you can add money to them online, too.
If she doesn't care, she doesn't care. It doesn't change my opinion of Wal-Mart though. :-)
Barack Obama: Change we can only imagine
this should be a clear picture of what the American Experience truly is about..............DEBT
Health Care, privatized.....cover through insurance (that doesn't cover anywhere near the cost of coverage) = DEBT
Education system geared toward providing the least amount, forcing you to go to charter/private....then higher education and rack up loads of DEBT
Housing market that is geared at putting you into larger homes than you can afford, accumulating DEBT
An archane tax code that requires its own (CPA) industry to keep you from being buried in DEBT.
...a three hour movie.
http://www.youtube.com/watch?v=rC720Cl3N-0
audit-prosecute-incarcerate
Purchased a year ago.
Study the symptoms not the virus...
I'm just old enough to remember when DEBT was something people were NOT supposed to have. It was considered a sign of bad money management if you owed money. Now the system is set up to make it as hard as possible to live without it.
Hard or not, I refuse to have debt. I have no credit cards, no loans, none of that. Other than owing $50 or so on my utilities every now and then, I have zero debt. Pay cash for everything (or use debit card from my checking account). No way am I gonna get hoodwinked into that shit. I'd rather be poor than enslaved, thank you.
There's always free cheddar in the mousetrap, baby. - Tom Waits
how much money these banks have to burn
or, more likely, they know thw legislation coming out has other loopholes they can take advantage of
my bank offered something called a check guarantee card. If you were employed, you could charge things against your account and they would simply take the money once you got paid, rather than charging the rapacious overdraft fee, which is essentially a loan at around 300% interest.
The over draft fees because people weren't paying them. They simply didn't have the money to pay them.
As for not allowing to withdraw money that isn't there? No shit.
This was a scam that backfired on them. I'll bet that they lost money on this scam. They do not do things out of the goodness of their hearts. Banks have no heart. They couldn't care less. What they do care about is their bottom line. If they make money or not.
If they don't? They cancel the program/scam.
What is your conceptual, continuity?
They probably stopped because too many people were just letting their accounts lapse and BofA was getting stuck with the bill. If they are like most banks, they also charge you $5 each day your account is overdrawn, making the hole too big to climb out of for many people.
...that 25% of our nation's banking revenue comes from overdraft fees? They've held prospectus meetings with their shareholders bragging about making it harder to get your OD fees forgiven.
It's hard to believe BofA would do this without thinking of some way to make it back. There's gotta be some shell game afoot. This is a big-ass, predatory bank we're talking about. These scumbags are not altruists, trust me.
JP
http://giveusthisdayourdailtydread.blogspot.com
... and he is expected to "lose" millions as a result.
(The point being that the giving up of ill-gotten gain probably shouldn't be looked upon as an economic "loss".)
"Bank officials said that effective this summer, customers who try to make purchases with their debit cards without enough money in their checking accounts will simply be declined. Debit purchases account for roughly 60 percent of overdrafts at Bank of America, the nation’s largest issuer of debit cards"
They will now charge for debit cards to make-up for lost revenue. Do you really think they'll allow you to have the purchasing convenience of their credit cards at no cost? They loved it when you would over charge $20 so they could make $35. Everything is done by computer, don't you think the system knows your balance? Try to over-draft $100 and see what happens. The debit cards are just another money making invention of the bankers like... Credit default swaps!
Study the symptoms not the virus...
Just look at BOA's wiki and then VISA...
"In mid-September 1958, Bank of America launched its pioneering BankAmericard credit card program in Fresno, California with an initial mailing of 60,000 unsolicited credit cards."
-------------------------------------------------------------------------------------
Bank of America's history dates to 1904, when Amadeo Giannini founded the Bank of Italy in San Francisco
They're a step-child of the Federal Reserve.
Study the symptoms not the virus...
Do you think your credit rating matters?
The “conventional” wisdom is that you want to protect your credit rating at all costs. They (the credit industry that is) will tell you it’s so important and you should check and recheck it semi-annually. Get a big score, be worth something, be an upstanding consumer…
Bullshit.
Buying ANYTHING on credit in this economy is fiscally stupid. If you don’t buy anything on credit, then your credit rating doesn’t matter. Even the single big purchase most young people save for – the house – doesn’t count anymore. That industry is as bankrupt as the rest of the economy, prices have tanked, and even if you find a great deal and you wish to purchase, all you have to do is put down more than 25% and most lenders will disregard any credit rating score anyway.
I love the fact that I care not about my credit score. I’m also very proud of the fact that I have a BoA CC that I occasionally use, and pay off each month. This costs BoA. So… GOOD.
Imagine if everyone did as you? :P
"I’m also very proud of the fact that I have a BoA CC that I occasionally use, and pay off each month."
Depending on the type of transaction, the bank could be giving everyone a free loan. ♥
Study the symptoms not the virus...
...proudly proclaim to be a "non-solicitor" of banking industry services!
...at least until the fed starts lending to the american people at zero percent...
(like the fed now does for BOA)
audit-prosecute-incarcerate
There was a time 30-40 years ago that CCs were capped at 7%. Most people paid 3-4%. Rates of 30% APR or more were called usury and were the realm of back-street thugs. It was illegal. Today 30% is typical, and the banks don’t even make most of their money on this interest. They make it on fees (overdrafts, over-limits, monthly charges, etc.)
They are now worse than the back-street thugs.
And yes - the FED is lending to BoA at 0% interest while BoA lends at 30%.
since Reagans years
enough said
If people really wanna know who killed this country's economy, they need look no further than St. Ronnie. Fucker pulled the caps off of everything and now we're in the shithouse.
There's always free cheddar in the mousetrap, baby. - Tom Waits
What a joke. How can you lose millions when you are "too big to fail"? Need another bailout? Let us taxpayers help you!
like you just go to the bank, sign a piece paper and you got a credit card man."
Typical knowledge of economics of today's typical High School Grad.
...it is free.
(for BOA)
"THE FED" has been giving it away (to BOA) @ ZERO percent...(for a while now)
audit-prosecute-incarcerate
Wow, dude. It's like freeee. You just go to the bank, sign some paper, and then they give you a card dude. For credit and stuff.
But don't lose it, dude or then you're in some serious shit.
“Why would anyone with a functioning brain believe this guy?”
Some guy with an eating disorder
The horror, the horror.
Oh, excuse me while I relive my past experiences with BofA. Not cathartic at all. It's crooked from top to bottom.
And you kept telling them to STFU and stop whining because you were getting filthy rich of it, and wouldn't stop until Federal law FORCED you to.
Here's my addition to BoA overdraft horror stories. I thought sharing an account with my college age daughter would be a good way to keep track of her expenditures. I made certain when we opened the account that it would not permit overdrafts.
Imagine my surprise when the first charge for $10 came through. It was only $10 because I had a parallel account linked to hers. I quickly transferred more money to her account. The next I knew there were over $200 in overdraft fees attached to her account! My own account was low pending the float and BoA had assigned so many $35 fees for minor purchases (a latte at Starbucks, school supplies)that the fees themselves had put the account into overdraft! Then there were fees for "being" in overdraft, without any further charges!
I called to complain and managed to get all but $70 in charges removed. They acted like they were doing me a favor. $70 for a $3 latte! My point was that I had been assured when I opened the account that overdrafts would not be permitted. So much for bankster honesty. They have not yet responded to my letter of complaint.
I am shopping for another bank.
I hear Burnbanky over at The Fed is lending at zero percent!
audit-prosecute-incarcerate
They told me that the debit card has an implicit agreement that they will honor purchases (that's why everyone accepts cards), but that you will be charged for an overdraft EVEN IF you don't have overdraft protection enabled on the account.
and btw, ALL banks have the same policy as far as I know. Credit Unions may be a better option if you have that luxury.
My bank doesn't. If I don't have the money, the purchase is declined. Happened just two weeks ago; luckily I had some cash on me. A woman in line behind me said she envied me that my bank did that. I told her it made me pretty happy too, not being ripped off for $30.
There's always free cheddar in the mousetrap, baby. - Tom Waits
they alerted me to my debit card info being stolen from a web purchase and being passed around overseas.
They didn't tell me they would be the ones to steal $500 in "overdraft" fees from my bank account weeks later. They do play games with posting charges from biggest to smallest to maximize the overdrafts on many smaller purchases turning those $5 lattes into $70 lattes.
I left the account in a negative position and switched to a credit union. Wachovia will never get another cent out of me again.
Wachovia, based in Charlotte, North Carolina, is a diversified, wholly owned financial services subsidiary of Wells Fargo.
Study the symptoms not the virus...
Debit cards should be rejected if the funds are not sufficient. I agree with BoA on that. Large banks may make changes in policy because of pressure from consumer groups, but that doesn't mean that the change is permanent. BoA and other big banks rarely do what is good for the consumer.
I thought that if you had a Debit card and a credit card or a savings account, if you had insufficient funds, the overdraft protection would be taken from either the credit card or the savings account -- so there would not be an overdraft fee. If people don't have a credit card or savings account, I would think the purchase should be rejected.
overdraft protection with BofA; it's not automatic; and it only works with the debit card, not a credit card; the credit card just won't allow the purchase;
it's a no brainer really; they take the money out of the savings account; when money is deposited they put the amount back into the savings account unless you make it a permanent transfer; at least that's what they've done for me a couple of times.
Visa Commercial - Visa check card (1:00)
Study the symptoms not the virus...
...one!
(hands clapping)
audit-prosecute-incarcerate
1) Working Group on Financial Markets
2)Rep. Alan Grayson: "Has the Federal Reserve Ever Tried to Manipulate the Stock Market?**"
3) Primary Dealers List
** Notice the Chairman... Rep. Melvin (Mel) Watt [D-NC12]Top 20 Contributors to Campaign Cmte
Study the symptoms not the virus...
Oh no ! Don't take those fees from me and my family ! That's Socianazmunism !
Insanity , it is what it is , there is no understanding it .
You always have the option to decline overdraft protection. I didn't, because I didn't understand what it was. I thought overdraft protection meant they withdrew money from your savings account to pay overdrafts--not that they'd cover the overdraft themselves, charge you $38 per transaction for the privilege, and not let you know they're doing this until after the fact.
Wow, lots of folks who can't even keep an extra 50 bucks in their savings accounts to cover accidental overdrafts, hm?
.
...this income without finding some other slimy way to replace it, you don't know BoA.
A while back the local BoA offered an amazing (for the times) deal on a no-risk CD (after five days unlimited withdrawals without a fee). I went it to see about it and asked the bank manager about "fees." She got all defensive and said they had to charge fees on everything because they were hurting so bad from fraud. I went home that night and downloaded a recent article explaining how BoA's latest quarterly earnings were up 150%; the previous quarter they'd increased by 135% (percentages are approximate). Tough times. I took the print out to the bank and dropped it on the manager's desk without comment. She looked at it; read a little and looked at me. I said, "Next time at least make your story plausible."
I left Chase, because they weren't allowing people to opt out of overdraft "protection". I went to a smaller bank (EastWest) that doesn't have it AT ALL. You either have the money in your account or you don't, end of story. No sneaky fees. It's a pretty good bank (though their phone system kinda sucks), and I'm happy to give them my business.
There's always free cheddar in the mousetrap, baby. - Tom Waits
We get great customer service there. And, if we have a check come in that we don't have the funds for (yes, it happens occasionaly), they'll call us and let us know so we can run over and make a deposit. No bounced checks, no fees.
B of A has announced it is dropping overdraft fees. Good, but too late for us.
My wife and I are 100% disabled and we were direct-depositing our Diasability checks ( our only income) directly into our B of A account. We live frugally, and after we deposited $3100 into our account over a week period in January, I found out that we had about $960 left in our account and we had not yet paid our primary mortgage of $1005 on a house the family has lived in since 1975. We scrambled with the primary lender and paid them $800 (We have since paid off the other $205 on our mortgage). That left us about $160 for the entire month of January. Apparently, through creative accounting, these bastards had charged our account several hundred in "overdraft" fees over the last several months. This really pissed me off, so I went down to B of A in early January and took out all my money and asked them to close my account. They refused because I had a $40 payment on a credit card I had with B of A. They still are trying to collect $300 in "overdraft" fees even though I have done no business with them since the beginning of January. And I paid the $40 payment on the credit card and B of A told me it wasn't enough (they wanted another $5 and I told them where to get it). They told me it would go on my credit report and I told them I didn't care as they had already wrecked my credit and I was unable to open another account at another bank.
I use a pre-paid cash card and money orders now. It's the middle of my month and all my bills are paid and I still have several hundred dollars left.
About two weeks ago, B of A made me an "Offer of Compromise" to pay off the credit card,over the phone. I said fine, if B of A sent me a letter that said the credit card would be satisfied in full and the account would be closed if I paid the "Offer in Compromise" amount. I have yet to receive this letter, and I am not paying them another penny until I do. In my estimation, they can rot in Hell.
I am sure others have similar situations. The cartoon of the guy with the giant screw in him comes to mind.
Too large to fail? This two-fisted jerk job shows that at B of A at least, the right hand doesn't know what the left hand is doing. And this slobbering monolith has consumed billions of consumer tax dollars ( $20 billion in bailout funds and $118 billion of loan guarantees of bad assets)while they pay their CEO $6.5 million dollars a year.
Funny that B of A was originally founded by Italian immigrants because they wanted a place where immigrants weren't shafted by the big banks.
This situation made me laugh, cause B of A has sure been screwing me and my wife.
No tears will be shed here if B of A fails, because they have been working overtime to make me and my wife fail.
This situation proves the old maxim "Work hard and be honest and you will be justly rewarded."
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