Have you ever opened your bank statement and wondered why your debit card was charged $70 for the $20 worth of gas you pumped the other day? When you call the bank, you find out it is only a temporary “Hold” on the funds, when the final tally is applied, the $20 charge will be there, and the $70 will be erased.
You check a few days later online, and, sure enough, the $70 charge is gone, replaced by the $20 you expected. But wait a minute… it looks like you had a negative balance for some of those days… but that can’t be! You had $51 in the account that day!
There’s also listed a $27 charge for an overdraft, make that three overdraft charges of $27 each. Then there are the $4.98 combo burger meal you bought right after buying the gas, and the $11 worth of stamps at the Post Office kiosk. And then there’s the “daily” overdraft fee - $5 for each of three days. And then finally the deposit you made of, say, $2,010.00, the morning after you bought the gas
As they say on Facebook, WTF????.
And thus you discover one of the biggest banking scams of our times.
It’s called “automatic overdrafts.” Used to be if there wasn’t enough money in your account, the little window on the gas pump read “Not Approved”, and your debit card transaction was canceled. Today, the bank does you the big favor of giving you automatic overdraft privileges, so when you go a little bit over, they’ll say “Approved” anyway. Oh, and by the way, they’ll charge you for it – in the range of $25 to $35 for each transaction.
Since you didn’t have $70 when you pumped the gas, the wheels were set in motion.
So the gas wasn’t $20, it was $70 for three days, and ultimately $47. The hamburger meal was $31.98, and the stamps were $38.00. Plus the $5 daily fee, times 3. You thought you had $51.00, enough to cover $20 + $4.98 + $11.00, with a bit to spare. Instead, you’ve been charged $131.98, leaving you with a negative balance of -$80.98.
Oh, and that deposit… since the gas charges didn’t finish being processed for three days, and you made that deposit the very next morning, you might have thought everything would have been fine. But no. The deposit was over $2,000, so they put a “Hold” on those funds until the check cleared. So you didn’t get credited for three days. Presto, the bank made a tidy little sum of $96. The $20 gas draft alone earned them $27 in interest, for an APR of 3250%. In America.
And this is how the banks of America pocketed $27 Billion – yes, that’s BILLION, in debit card overdraft charges last year.
About 77% of large banks have automatic overdraft privileges. And some will change the sequence of their charges to their advantage, to multiply the fees you owe.
These are the banks, the folks who came so close to bankruptcy that they needed Billions of dollars in tax payer money just to keep the doors open.
It just seems to us that if they can legally steal money from us this way, and still can’t make a go of it, there is something really, really rotten in Denmark – or on Wall Street.
If you want more info on these outrageous, and quite common, banking practices, visit the Center for Responsible Lending. http://www.responsiblelending.org/ It’s probably a good idea to find out what YOUR bank does. You can demand that they remove the automatic overdraft – or change banks.
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And while we’re on the subject of money, we can’t fail to take note of the outpouring of dollars inspired by Rep. Joe Wilson (SC) and his unprecedented and unbelievably rude heckling of the President during his address to the Joint Session of Congress. The good news is, Rob Miller, who will be running against Rep. Wilson in 2010, has received over $700,000 in campaign contributions since the country discovered what a sad sack of you-know-what that Wilson is. The bad part is, Mr. Wilson seems to be turning a pretty penny himself, with the crazies championing him as a hero and martyr, sending money, and buying T-shirts that say “I’m with Joe Wilson”. In America.
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Finally, we offer respectful silence, meditation and prayer for the victims of that fateful day exactly eight years ago, when America's domestic tranquility was shattered, changing us forever.
Lots to ponder over the weekend.
JM
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I agree J & S. What the banks are doing is criminal. What about banks raising interest rates on credit cards from 9.7 percent to 17 to 27 percent or higher on purchases that were purchased at a lower rate just because one payment was a couple of days late? Seems like loan sharking to me. Has anyone noticed that the banks hardly pay any interest on money that is in savings accounts or CDs? It would be better (safer) to put your savings in mason jars and bury them in the back yard. I am all for making a dollar, but what these financial institutions are doing is predatory and criminal.
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