News That Matters

The Thirty-Eight Billion Dollar Fee.

Excerpted from News That Matters, June 14, 2010

When you do your personal checking you look at your balance and see that there’s, oh… say, $1000 in your checking account. So you write check #100 for $100. and you write $900 as your balance. Then you write check #101 for $200 and you write $700 as your balance… and so on. Right? That’s how everyone does it. Well, that’s everyone except Bank of America.

So, let’s say you’re the typical dude or dudette living on the financial edge. In that case you may, from time to time, use the bank’s over-draft protection program knowing that there’s a fee involved for what amounts to a short-term loan of a day or two and you’re willing to accept that fee, usually around $30-$35.

Over the weekend you look at your bank’s online system and see that there’s $500 available in your account and you go out and using your debit card you buy gasoline on Saturday morning, some groceries after and so on through the weekend. On Sunday evening you see that each debit has been noted to your account, the available balance being lowered for each one. Now you have $300 in your account and you write a check for some bill for $600 planning to add enough to your account on Wednesday to easily cover that check – including the overdraft fee which you are happy to pay for the convenience.

Fee’d To Death

On Tuesday morning you awake to a terrible surprise to find that each of your charges over the weekend is now carrying an over draft fee of $35, even the 12 bucks you spent buying two Kids Meals at McDonalds. How did that happen? Well, see, Bank of America doesn’t actually, really and genuinely tap your account over the weekend because their computers don’t work even though the online banking system says that they do. So on Monday night they grab all the charges from Friday and apply the largest ones to your account first.

This is a trick the banks play designed specifically to throw your account into overdraft so that the fees pile up rapidly becoming an onerous burden that can make or break people. In fact, its the tens of billion dollars in fees that have pushed many Americans over the financial edge and I know many of you have been there.

You call the bank and you ask them about all this and while customer service is very nice your call always ends up like this,

“Sorry you got screwed but we cannot and will not ever return your overdraft fees and we’re truly sorry but hell will freeze over and the Pope will convert to Judaism before we admit we ever did anything so cruel as to intentionally mislead you. Thank you for banking with Bank of America. Enjoy your day!”

And if you elevate the call all the way up to the upper echelons of the Customer Service loop, some guy with a cryptic name such as “Jeff 1580, Central California” and with a gruff, threatening voice, will angrily call you on his cell phone from the golf course with his pet Congressman caddying, and tell you that they’ve made their Final Decision so please, stop trying to understand the intricacies and secret banking practices that just cost you what could be hundreds of dollars. Someone has to pay the greens fees, right? And congressmen don’t come cheap.

You Are Not Alone

This happens every day to thousands of people across the nation and while Bank of America is the most hideously evil of the lot, many banks play this game and billions of dollars are pulled from the economy and go to subsidize executive bonuses, stock dividends, the purchase of Congressmen and Senators, nifty automated teller machines that work so slowly you have to shave again by the time you’re done using them and which cause traffic tie-ups on Friday evenings that CBS radio reports along with, “…and it’s 40 minutes to The George.”

What good are your online banking account balances if they’re not real? If you ask Bank of America for an explanation you’ll get one that does not make any logical sense. If you call again and get a different customer service center you’ll get a different but equally bizarre explanation. You could spend hours on the phone speaking to CS reps all across the nation and never get the same answer twice. In fact, it turns out that for Bank of America each CS center has different rules and different permissions.

But what’s more, is that if you call to complain and they’ve already refunded a fee at some point since dinosaurs roamed the earth, they’ll deny your request and then finagle with your accounts, signing you up for this or that, linking this account to that account, all with the promise that this will prevent future fees but that, in reality, will cause you even greater hardship in the future – and higher, much higher fees.

But this does nothing to solve the problem of the reality of how their internal accounting system works vis-a-vis what they show you on your computer screen. Those two systems will still be in disarray leading thousands of customers – each day – to believe they have available funds that they do not have, an intentional ruse by Bank of America and others, to confuse, befuddle and screw you.

Let’s say you are the persistent type and you know deep in your heart that someone at Bank of America can push the right buttons and refund those unexpected fees even though you also know they are strongly discouraged from doing so. You call the 800 number and you reach a dead end. You call again, getting a different call center and you reach another dead end. You call again… wash. rinse. repeat. All in all you spend about three and a half hours on the phone before the gruff-voiced guy calls you and menacingly tells you to stop calling.

You’ve spent about 210 minutes on the phone which cost Bank of America a tiny $4.20 in phone charges but way more than that in employee time and you earn a bit of satisfaction knowing you are making them slowly suck up those fees.

Then reality strikes! and you realize that they would spend any amount of money to defend themselves against what amounts to immoral and unethical – but quite legal – behavior.

And right before you tell the eleventh service rep that you hope they get genital herpes from their neighbor’s dog you also remember that they write the laws and so you are screwed no matter what you do or say, if you plead, beg and even cry on the phone. The call always ends the same, cheery way:

“Sorry you got screwed but we cannot and will not ever return your overdraft fees and we’re truly sorry but hell will freeze over and the Pope will convert to Judaism before we admit we ever did anything so cruel as to intentionally mislead you. Thank you for banking with Bank of America. Enjoy your day!”

Mostly due to the huge public outcry and Congressional hearings on the matter, starting this summer Bank of America will stop overdraft fees unless you specifically sign up for that protection – for an additional monthly fee. If you go over your account balance they will simply deny the charge. Or, so they say. In the crazy world of US Style Capitalism(tm), the simple acceptance of your monthly bank statement could be read as agreeing to a new fee or service. Even with a team of legal experts at your side and the assistance of a scanning electron microscope to read the “small print” on the cryptic letter you will receive from them you’ll, well, they’ll still screw you. That’s what they do.

The problem is so vast and so wide that popular websites have grown up over the past few years decrying Bank of America’s systems and service and the corporation has people on staff who do nothing during the day but log on to these sites and blame their victims. Yes, they actually hire people to kick you when you’re down. In public. Proudly.

Hey, I Just Bought Me a Congressman!

Moreover, this corporation spent $14.5 million in political donations in 2008 and donated more to political campaigns than any other bank receiving TARP funds which for them amounted to $40 billion. That $14.5 million bought them $2 billion in fees and overcharges that Congress refuses to control. For them, a well spent investment. For you and me? Not so good.

From OpenSecrets org:

The full list of TARP recipients and their congressional spending habits is here.

American Banking and Market News had this to say on May 10th:

“The Charlotte Business Journal did an analysis of Bank of America Corp (NYSE: BAC)’s giving and found that the company’s political action committee gave nearly have [sic] of its federal donations to members of the two committees which are shaping new banking regulations.”

There are three immediate problems here:

For one, banks need to make the accounts that show on their online banking services display the actual, real amount in your accounts, not the fake one they put there to intentionally confuse you. Second, they need to change the way they apply charges to your account so that they are applied in the order in which they come in – even over weekends – when their computers are on the beach enjoying a well-earned rest from calculating the $38 billion they collected in such fees in 2009. And third, when you enter your PIN number in a debit transaction that money should disappear – and I mean really disappear – from your account the moment the electrons from the gas station engage the electrons at your bank.

One local credit union says this about the use of their debit cards:

• Your transaction is debited from a designated checking account immediately.

I looked for the same information at Bank of America and found this:

Yeah. Nothing. Do you think they’re hiding something? As sure as a one-legged duck swims in a circle you can bet they’re hiding something. And while it should be their heads in shame, it’s just the opposite: they’re hiding their immense pride at being scum sucking bottom-feeders and making money doing it.

So what’s really going on in the background at Bank of America?

Any transactions made between Friday evening at 8:01 PM and Monday evening at 7:59 PM are bunched together and posted together in size order from largest to smallest Monday night to be effective at start of business on Tuesday.

At a local credit union;

Any transactions made between Friday evening at 8:01 PM and Monday evening at 7:59 PM are bunched together and posted – in sequential order – on Monday night. Debit card swipes (referred to as PIN transactions) are debited and posted at the moment they happen. Even on weekends.

Last year the British government took a huge step in forcing banks to behave by enacting laws that require charges be applied to your account in the order in which you make them. In the example cited well above you would have received only a single overdraft fee, the one you planned for, and not for the $12 Kids Meal or the .99 stick of gum you put on your debit card. In fact, in certain circumstances the British law works even on past charges and banks have returned near $600 million to customers with valid complaints.

Here in the US, Congress, if you can believe it, had to step in to start correcting the unethical behavior banks have been practicing for far too long. For one, Congress has put some controls on the way banks charge overdraft fees which requires your permission but as far as I know they’re not requiring banks to change the order in which they apply charges to your account. Some banks have made a switch to handle smaller charges first but they are still not applying them in the most logical way: the way they were made, sequentially.

Banks and the banking industry are united in their sentiment that ultimately it’s the job of customers to handle their money better and that fees would never be applied if customers simply understood the bank’s rules. While that seems fair on the surface, banks are also free to change the rules as they see fit without your foreknowledge and they do so as frequently as they can get away with it. And if someone in Congress gets uppity, they just buy them and continue on their merry way.

For example, just a few months ago I noticed the meager balance of my savings account had decreased by $5. I called the bank to find out that yeah, they started charging fees on those accounts if they didn’t have at least one direct transfer a month into them. Didn’t I read the notification? Now that account sits in the negative for which, I am sure, there will be a fee high enough to feed half of Uganda.

Fighting Back

Both Bank of America and Chase are the two worst offenders of these unethical practices and my advice is the following: unless a genuine Democracy arises from the ashes of this current system and the banking industry is regulated as they should be, pull your money from Bank of America and/or Chase and find someone else, someone who doesn’t work behind the scenes to find craftier ways of immorally and unethically separating you from your money.

If you have ever had a run-in with Bank of America and you’ve been tricked or victimized by them, here are some email addresses that might tickle your fancy:

ken.d.lewis@bankofamerica.com, colleen.haggerty@bankofamerica.com, britney.w.sheehan@bankofamerica.com, nicole.nastacie@bankofamerica.com, joe.price@bankofamerica.com, keith.banks@bankofamerica.com, michael.jones@bankofamerica.com, liam.e.mcgee@bankofamerica.com, brian.t.moynihan@bankofamerica.com, amy.brinkley@bankofamerica.com, steele.alphin@bankofamerica.com, liam.e.mcgee@bankofamerica.com, bradford.r.dinsmore@bankofamerica.com, michelle.shepherd@bankofamerica.com, maryellen.baker@bankofamerica.com

I can assure you that Bank of America is on a lot of people’s minds these days and it’s not in good way either. Here are just a few examples:

Washington homeowners file class action against Bank of America
Allegation: BofA took federal money, intentionally failed to meet its obligations

Bank America Loves You Too Much To Ever Let You (And Your Checking Account) Go

Bank Of America Misplaced Divorce Decree, Handed Over All My Money To Ex

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