Chase's overdraft fee scam ( now resolved but interesting discussion )

Brigadier

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Re: Chase's overdraft fee scam

Writing checks or making debit card purchases with a negative balance is against the law in most jurisdictions so if a bank covers someone's a$$ and charges a fee IMHO its better than being charged with a crime.

Too bad we can't turn that around on congress.
 

Monocrom

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Re: Chase's overdraft fee scam

I find it odd that the masses are miffed at banks for something that has been status quo for years yet no one rails against the "payday loan check into blah blah" local loan shark establishments that are littering our fair towns and burbs.

Those places cater to folks who either can't even do a half-@$$ed job of managing their money, or folks who have an unexpected expense and can't get help from anyone else.

Sure the interest rates at those PayDay establishments are high as Hell. But if your car breaks down, and you need it to get to work; what are you going to do if your credit is in the toilet? Lose your job or go to one of those PayDay places? The former will cost a lot more in lost income than the latter. Those places don't twist anyone's arm. And unlike a real Loan Shark, they don't break arms either. Ask a friend, family member, neighbor, or bank for the money. Ask the boss for an advance. If everyone turns you down, it's nice not having to deal with a criminal Loan Shark in order to get the money. In the past, that was the only option.
 

jtr1962

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Re: Chase's overdraft fee scam

I find it odd that the masses are miffed at banks for something that has been status quo for years yet no one rails against the "payday loan check into blah blah" local loan shark establishments that are littering our fair towns and burbs.
I think Congress is going to take aim at those places next. No arguments from me that people should take responsibility for their affairs, not spend more than they have, nor expect others to cover for them. However, it just irks me when some take advantage of other people's irresponsiblity. I actually had the opportunity recently to loan an acquaintance several hundred dollars, and in return he would have paid me $100 interest for a week. He said it would have been a better deal than those payday loan places, and it probably was. Assuming I could have trusted him, I could have made an easy $100. He even offered to leave an expensive watch as collateral in case he defaulted. That's how desperate he was. I refused him flat out. I told him a better plan was to just somehow make do without those few hundred dollars for the next week. Doing that, he would save on whatever fees he would have paid me or the local loan sharks, um, payday loan people. Come payday, he would have extra cash in his pocket which he wouldn't have otherwise had, so he could take that cash, and put it aside for a rainy day. I even offered to hold the cash for him if he felt he lacked the discipline to keep from spending it. Guess what? The guy told me I was a jerk for not "helping" him, and went off to the payday loan place ( or so he said ).

From what I know, it wasn't like he needed this money for expenses ( he lives with his parents ). Rather, it would have been for the usual going out with friends, drinking, cruising around aimlessly, buying yet more crap he doesn't need. And for this he was enthusiastically willing to drop $100.

Seeing the spending habits of him and others I've known ( one of my mom's cousins works at Home Depot but shops only at Lord & Taylor ), I really can't feel sorry for these people. I'm only glad that there will be fewer opportunities for others to profit off of their lack of discipline. And maybe if these people can no longer spend more than they make, the message will finally get through.

On another note, I will enthusiastically loan money to my siblings or my mom interest-free for legitimate emergency expenses if they're short. I do this knowing that indirectly I'm screwing the banks out of the usurious interest they would charge if these expenses were put on CC, and paid off a little at a time.
 

Beamhead

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Re: Chase's overdraft fee scam

I think Congress is going to take aim at those places next. ................ I'm only glad that there will be fewer opportunities for others to profit off of their lack of discipline. And maybe if these people can no longer spend more than they make, the message will finally get through.
What next, retailers for returned check fees?
 

Brigadier

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Re: Chase's overdraft fee scam

They can check their on line banking with their smart phones. :ohgeez:

I use Bank of America, and Mobile Banking is STILL not available in my state. So no, not everyone can do that.
 

jtr1962

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Re: Chase's overdraft fee scam

What next, retailers for returned check fees?
I doubt it-that's a legitimate business expense. The retailer has no control over whether or not someone sends them a bad check, so they have to be free to cover their expenses should it occur. The banks ( and payday loan places ) are free to loan or not loan money to irresponsible people. If we limit the fees these places can charge to the point where it doesn't cover their risk, then these types of loans will disappear. Given that the bulk of payday loans or overdraft enables continuing irresponsible behavior, this can only be a good thing. I've already found that the only way some people learn control over their finances is when others, whether they be banks, payday loan places, or relatives, stop bailing them out.
 

LuxLuthor

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Re: Chase's overdraft fee scam

Sorry, but the current environment of protecting people from their own irresponsibility through legislation or regulation, only results in their being more irresponsible since they now have a sugar daddy to cover their antics.

What's more, the sugar daddy that everyone is depending on is out of candy, and on his final days of life support.
 

Badbeams3

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Re: Chase's overdraft fee scam

I think the days of paper checks are coming to an end. Myself...I haven`t written a check in...so long I can`t even remember...more than 10 years maybe.

I hate being held up in line with some check writing dinosaur. Ever notice how they wait to the very last moment to ask...What store is this? It`s Walmart mam...How do you spell that? Same as yesterday...W A L M A R T...make it out for $1.49...for your soda. Oh my. My pen doesn`t seem to write, do you have one? ...thanks, How do you spell that again?

:ohgeez:
 

jtr1962

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Re: Chase's overdraft fee scam

Sorry, but the current environment of protecting people from their own irresponsibility through legislation or regulation, only results in their being more irresponsible since they now have a sugar daddy to cover their antics.
You're missing my point. I couldn't care less about protecting people from their own stupidity. I just don't think large institutions should enable it and even profit by it. If someone is hell bent on spending more than they have, and the banks or payday loan stores no longer oblige them, maybe they'll go to a loan shark. Eventually, they'll either miss a payment and end up in a dumpster, or decide this is not a good way to live. Problem solved either way. A fair number will just reign in their spending habits once the ready sources of cash disappeared.

The point is right now a lot of these people, many of whom would never think of going to a real loan shark, have a sugar daddy to cover their antics, namely the institutions I mentioned. Same with all those who charge to the hilt, then declare bankruptcy. Who do you think pays for all that? You and me in the form of much lower interest rates on our deposits. If banks let virtually anyone borrow money, sure, they have to cover their risks. But fact is continuing to lend people unable to pay back is not sustainable over the long haul. We've already seen some of the end results of this policy with the mortgage meltdown. Once the bank's hands were tied on mortgages, they simply switched to another mechanism to lend money to people who can't afford to pay it back. I'm glad the banks are being reigned in. Not so much for the sake of the irresponsible people doing the borrowing, but because it will likely prevent another meltdown scenario.
 

jtr1962

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Re: Chase's overdraft fee scam

I hate being held up in line with some check writing dinosaur. Ever notice how they wait to the very last moment to ask...What store is this? It`s Walmart mam...How do you spell that? Same as yesterday...W A L M A R T...make it out for $1.49...for your soda. Oh my. My pen doesn`t seem to write, do you have one? ...thanks, How do you spell that again?
I haven't seen that in a long time. Now instead I get people holding up the line with debit cards. "Oh, what button do I press after I enter my PIN" "Is there any way to check if I have enough in my account to cover this" Follow this with excrutiatingly slow hunt and peck entering PIN. "It's not going through, what's wrong" "Oh, invalid PIN" Another wait as customer slowly reenters PIN. Finally!

In the time it takes a lot of people to pay with debit cards I could count out pennies to pay for my purchase. Exactly what is so bad about using cash for small purchases these days? It's obvious when you're low, you don't need a PIN, everyone accepts it.
 

EndOfTheTunnel

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Re: Chase's overdraft fee scam

So far I haven't come across anything that I can't pay with either.

Same here, almost. Most retailers frown upon using your debit card for small sum purchases, like a pack of gum, for example. We use the Interac debit system here, which apparently also charges a fee - some retailers won't accept debit on purchases under a certain amount. I've seen 'minimum debit purchases' of $5, $10 and even $20. Also, there are plenty of places that still accept cash only (mostly restaurants, on account of the lunch rush).

Cheques, though - I don't think I've ever used a cheque to pay for something retail. Monthly rent, and the occasional charitable donation. My checkbook lasts at least 2 years before I have to swap in a new one.


Anyway, our banks are now required by law to fully and prominently print the interest rates and fees they charge you on each monthly statement. Though, most banks showed this information anyway prior to this legislation, though it was usually in the form of a line item on the statement. They must also inform you at least 2 months in advance of any interest rate changes or fee changes they're planning (except rates based on the prime rate, of course).
 

LuxLuthor

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Re: Chase's overdraft fee scam

You're missing my point. I couldn't care less about protecting people from their own stupidity. I just don't think large institutions should enable it and even profit by it. If someone is hell bent on spending more than they have, and the banks or payday loan stores no longer oblige them, maybe they'll go to a loan shark. Eventually, they'll either miss a payment and end up in a dumpster, or decide this is not a good way to live. Problem solved either way. A fair number will just reign in their spending habits once the ready sources of cash disappeared.

The point is right now a lot of these people, many of whom would never think of going to a real loan shark, have a sugar daddy to cover their antics, namely the institutions I mentioned. Same with all those who charge to the hilt, then declare bankruptcy. Who do you think pays for all that? You and me in the form of much lower interest rates on our deposits. If banks let virtually anyone borrow money, sure, they have to cover their risks. But fact is continuing to lend people unable to pay back is not sustainable over the long haul. We've already seen some of the end results of this policy with the mortgage meltdown. Once the bank's hands were tied on mortgages, they simply switched to another mechanism to lend money to people who can't afford to pay it back. I'm glad the banks are being reigned in. Not so much for the sake of the irresponsible people doing the borrowing, but because it will likely prevent another meltdown scenario.

OK, well I agree with all that, except I do not believe the Govt is able or will adequately "reign" in anyone or anything. If they were, they would start with their own houses. As bad as they are, I at least trust a corporate institution that is accountable to stockholders way more than politicians who at best, are manipulated pawns.
 

turbodog

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Re: Chase's overdraft fee scam

If you read through the link to the class action lawsuit you can see that the banks basically have policies which both encourage irresponsible behavoir, and also maximize their profits from such. ...


Welcome to the real world. Why don't you stay a while...
 

turbodog

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Re: Chase's overdraft fee scam

It's not really a service unless you ask for it. If they were providing a service, they would do so in a way that minimizes the charges. They actually maximize them.

My bank has in its rules "Checks will be debited before deposits are credited. The order in which the checks are debited is up to the bank."

Here's how that played out for my son:

Deposited pay check Friday after 5. It was not processed till the batch of the next business day (Monday night). Had a balance of $1050 plus his paycheck.

Gave 1100 to his landlord. Bought groceries and several other purchases for under $50 each. I think there were 4 checks altogether.

The landlord deposited the check Monday. So did the others.
The bank chose to pay the $1100 check, leaving a $50 deficit and a $35 fee. Then it processed the other 4 checks, bouncing them and charging a $35 fee each time. Now he's down $175. The bank then credits the paycheck. And they are nice enough to send him the overdraft notice in the US mail, first class.

By the time he gets the letter, he has mailed the rest of his bills, thinking that he has $150 left over after all are paid. Instead, he finds that several more have bounced and he loses another $100.

The bank made more than $250 by manipulating the deposits and debits to their advantage.

Even if the deposit was not valid or was delayed, they could have bounced the first one and paid all the rest, resulting in a single overdraft. Mind you, they bounced all the others and only paid the first, which set up the cascading penalties.

Yes, I'm serious. It's criminal what they get away with.

I am surprised nobody has mentioned the bank's take on this. Would you rather bounce a $10 charge to the grocery store or your rent/mortgage? The latter will screw up your credit which will end up costing you MUCH more than overdraft fees will.
 

turbodog

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Re: Chase's overdraft fee scam

They can check their on line banking with their smart phones. :ohgeez:

You can also enable it where you get an email/etc when the balance falls below a certain point. I get weekly emails on what the balance is.
 

turbodog

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Re: Chase's overdraft fee scam

I doubt it-that's a legitimate business expense. The retailer has no control over whether or not someone sends them a bad check, so they have to be free to cover their expenses should it occur. The banks ( and payday loan places ) are free to loan or not loan money to irresponsible people. If we limit the fees these places can charge to the point where it doesn't cover their risk, then these types of loans will disappear. Given that the bulk of payday loans or overdraft enables continuing irresponsible behavior, this can only be a good thing. I've already found that the only way some people learn control over their finances is when others, whether they be banks, payday loan places, or relatives, stop bailing them out.

This will be offset by increases in fees/etc elsewhere. Banks/business ARE going to make their profit. Consumer pays for all. Net effect is negative as it costs time/$ to lower one fee and increase another. Likely better off staying put.
 

turbodog

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Re: Chase's overdraft fee scam

Wake up folks! Ditch the plastic. Keep a reserve in the account. Live beneath your means! Be fiscally responsible.

Now... I'm sitting back and waiting for all those who advocate fiscal responsibility for congress/wall street/enron/worldcom/etc to rail about how they are different and can't cope.

And holy crap... don't throw away check registers and account statements! Toss them in the attic in a box, but keep them.

I mean I agree. Fees are high and don't always reflect true cost in that area of banking. So what? That subsidizes area where banks are expected to offer stuff for free. Enjoying that free checking and that subsidized $20/year safety deposit box rent?

I've got the overdraft thing also, was included with multiple accounts. They transfer $ from one to another if needed. And I automatically assume then if ever used I will likely get raped by fees/etc, just because that's the way most places are. However, that will come with the benefit of having my transactions clear and not bounce.

Man up. Realize they will screw you if given the chance. Don't give it to them.

As Woody says: Nut up or shut up...
 

gadget_lover

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Re: Chase's overdraft fee scam

I am surprised nobody has mentioned the bank's take on this. Would you rather bounce a $10 charge to the grocery store or your rent/mortgage? The latter will screw up your credit which will end up costing you MUCH more than overdraft fees will.


I get the feeling that turbodog has never experienced any of this first hand, either through good money management or just enough cash in the bank that it is never overdrawn. These policies hurt people who do not have reserves to pull from.

When the bank charges you for overdrafts that ALSO goes against your credit score. Ask me which I prefer, a bounced mortgage check? Cascading bounced check fees that eat up 1/10 of a paycheck that is already too small? I'd rather bounce the one and make it good as soon as the bank releases the hold on the deposit.

The bank's take on it has nothing to do with what is good for the consumer. Their focus is maximizing profit for the shareholders.

Daniel
 

Beamhead

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Re: Chase's overdraft fee scam

I get the feeling that turbodog has never experienced any of this first hand, either through good money management or just enough cash in the bank that it is never overdrawn. These policies hurt people who do not have reserves to pull from.

Class envy/warfare much?



The bank's take on it has nothing to do with what is good for the consumer. Their focus is maximizing profit for the shareholders.

Daniel
This cracks me up, do you have any idea who the stock holders are these days? It's granny's IRA or juniors state employee pension fund or your 401k.
 

gadget_lover

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Re: Chase's overdraft fee scam

Once upon a time, it was considered immoral and wrong to take advantage of a person's ignorance in a specialized field like loans and credit. There were Usury laws that at least gave a person a chance to keep from being shafted if a bank got greedy. Banks were not allowed to make loans that they knew would fail. They were not allowed to charge huge fees.

A while back (i believe it was during Regan's administration) those laws were weakened, and are now virtually gone.

It's still not right to take advantage of people, and a suggestion to "man up" sounds like it's in support of the right to rip off people. That just does not sound right on CPF.

Daniel
 
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