Overdraft and bounced-check penalties are now the top source of revenue for many institutions »
Posted By Eagle_Eye 2 months, 3 weeks ago in Business & Finance
Before Alannah Kern and her husband, Alan, left for a vacation in July, she mailed a check to pay for a new health insurance policy that was to take effect in September. She figured the insurer wouldn’t cash the check nearly two months before coverage was to begin.
“I sent them a postdated check 45 days early because we were going away and I was nervous,” says Alannah Kern, 65, who lives outside Palm Springs, Calif. “I didn’t want to take a chance and not be covered.”
While the couple was visiting relatives in Canada for three weeks, the insurer deposited the check. That plunged the Kerns’ account into negative territory. Their bank, Wells Fargo, covered the check and then slapped them with fees—$35 for the overdraft and a $5-a-day penalty until funds were deposited to replenish the account.
The Kerns, who monitor their account online, quickly contacted the bank, which agreed to reduce both fees.
Those charges incurred by the Kerns, and by others in similar situations, are proving to be a huge moneymaker for the nation’s banks. According to a new report, banks and credit unions this year will collect a record $38.5 billion in overdraft and bounced-check fees.
Read Full Story at bulletin.aarp.org »
148 Views Share Story 12 Comments Report
Submitted By:
Eagle_Eye
I am a female who has lived a complex life with complex situations and have learned a lot from my experiences.
I love the Environment ...
Who Also Submitted: All »
RSS Join the Discussion
+ Add CommentComments So Far: 12 (view all)
-
67%
slate2 months, 3 weeks ago
This comment is below the standard viewing threshold View It »
Dang vultures,,,,,,,,, they should make debit cards wher they don't work if there aren't enough funds in the account, just like if you try and take money from an ATM. Now if they want to make it where you can pull money out of an ATM if there are not enough funds then make you pay, that would at least be fair (if they insist on letting them overdraw on a debit card, just because it's easy money for them).
Reply -
40%
stephen-johnson2 months, 3 weeks ago
This comment is below the standard viewing threshold View It »
"Just under 10 percent of customers pay about 90 percent of those fees. What do they have in common? The lower their credit score, “the greater the tendency to incur overdraft fees,” Moebs says."
Reply
Bank fees are a nuisance, but 90% of banking customers are hit with only 10% of the fees. Attempts to "reform" fees will subsidize the bottom 10% to continue their irresponsible behavior on the 90%'s dime.-
83%
Beau78902 months, 3 weeks ago
This comment is below the standard viewing threshold View It »
Oh, get serious, stephen. If the banks actually had a problem with those customers with a low credit score making overdrafts, they'd disallow the transactions instead of turning those overdrafts into a revenue stream. After all, that's what they used to do before they sold what was left of their souls.
Reply
-
-
100%
MeanMrMustard2 months, 3 weeks ago
This comment is below the standard viewing threshold View It »
We had a problem with Chase Bank.We would deposit money in the checking account but,unknown to me, the bank wouldn't post it as deposited for 2,sometimes 3 days.Any automatic withdrawals that came in that time would be paid by the bank and then they charge $35 penalty and send it through 3 times.We have since left Chase after losing about $1000 this way.I don't care what any fine print says,if I walk into a bank, hand a teller money and leave without it,it's deposited!
Reply
Another little trick by the credit card companies,they lowered my wifes credit limit and are now charging over the limit fees for funds that were spent before they even lowered the credit limit. -
100%
rumple4skin2 months, 3 weeks ago
This comment is below the standard viewing threshold View It »
I had an account with Service Federal Credit Union. My payroll check was deposited directly into the account. Paydays were every other Thursday. My check was deposited on Monday prior to payday and SFCU made my money available the day it hit my account. I did not have to wait until the payday Thursday.
Reply
It is my belief that all direct deposits "arrive" well before folks' payday. What happens to this massive amount of electronic cash? I think that is used for short-term loans -24-48 hours - to make money off our money.
I did thank my bank manager for not holding my money and making it available as soon as they had it.
Anyone else with a similar experience?
Add a Comment
Sign In With Your Propeller Account
Please keep your comments relevant to this story.
To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.