Re: Chase's overdraft fee scam
GL you get an invite. :laughing:
GL you get an invite. :laughing:
Chase's overdraft fee scam ( now resolved but interesting discussion )
- Thread starter jtr1962
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jtr1962
Flashaholic
Re: Chase's overdraft fee scam
However, what they made on credit pales next to what they made on overdraft fees. I think it was close to $40 billion for 2009. I don't see how they can make up for that with other fees. There's only so much you can charge for checking or a CC before the customer will jump ship. Then again, maybe they don't have to collect as much in fees if they reduce their expenses. By just not allowing people to spend more in their accounts with their debit cards, they're lowering their exposure to risk, and their expenses, quite a bit. I'll hazard a guess that the banks will make just as much in 2010 despite the changes in overdraft laws without relying much on other fees. That same 14% or whatever that paid most of the overdraft fees likely cost the banks nearly as much in defaults. How many probably just walked away from their accounts once they became negative by four figures? Sure, the bank can try to collect, but for the most part they're dealing with people who have low, sporadic income, sometimes off the books. Lots of luck getting anything. In fact, lots of luck even finding a lot of these people given how often many on the low end of the income scale move.
I'm not disagreeing that they won't try. We see what already happened when the credit laws were changed. The banks basically said since we won't be able to make as much money in the future we'll have to make up for it now, and then put through all kinds of interest rate increases prior to when the laws took effect.
However, what they made on credit pales next to what they made on overdraft fees. I think it was close to $40 billion for 2009. I don't see how they can make up for that with other fees. There's only so much you can charge for checking or a CC before the customer will jump ship. Then again, maybe they don't have to collect as much in fees if they reduce their expenses. By just not allowing people to spend more in their accounts with their debit cards, they're lowering their exposure to risk, and their expenses, quite a bit. I'll hazard a guess that the banks will make just as much in 2010 despite the changes in overdraft laws without relying much on other fees. That same 14% or whatever that paid most of the overdraft fees likely cost the banks nearly as much in defaults. How many probably just walked away from their accounts once they became negative by four figures? Sure, the bank can try to collect, but for the most part they're dealing with people who have low, sporadic income, sometimes off the books. Lots of luck getting anything. In fact, lots of luck even finding a lot of these people given how often many on the low end of the income scale move.
gadget_lover
Flashaholic
Re: Chase's overdraft fee scam
I sincerely doubt that I have any reason to envy your income or your class.
But I do remember what happened when I was young and barely getting by.
Besides, you missed the point. If you have never seen your grocery money for the month disappear due to arbitrary banking practices like these, then it's much easier to be uncaring about the problems and suffering it causes.
The stock holders are a bit of everyone, including other businesses. But that does not matter. If granny gets slapped with hundreds of dollars in fees, she will not get that back from her IRA. The big investors are not hit with those fees, so that's where the money ends up.
Daniel
I sincerely doubt that I have any reason to envy your income or your class.
But I do remember what happened when I was young and barely getting by.Besides, you missed the point. If you have never seen your grocery money for the month disappear due to arbitrary banking practices like these, then it's much easier to be uncaring about the problems and suffering it causes.
The stock holders are a bit of everyone, including other businesses. But that does not matter. If granny gets slapped with hundreds of dollars in fees, she will not get that back from her IRA. The big investors are not hit with those fees, so that's where the money ends up.
Daniel
Re: Chase's overdraft fee scam
Don't live beyond your means.
Oh I am familiar with getting by.I sincerely doubt that I have any reason to envy your income or your class.
Don't live beyond your means.
Again, class envy/warfare? FTR I am NOT for "too big to fail bail outs". Let them fall like all irresponsible fools but that will definitely harm more than the "big investors".
jtr1962
Flashaholic
Re: Chase's overdraft fee scam
I agree wholeheartedly here. Unfortunately that era passed with the passing of the founders of these institutions, and also the changes on Wall Street. The standards for what Wall Street considers a profitable business have changed from 30 years ago. The banks and every other publicly traded company has had to adjust to the new standards. IMO, the standards are unrealistic and not conducive to long-term stability. Expecting year after year of growth, even from large companies with a large market share, makes for short-sighted management. End result is companies make money any way they can, even if it means taking advantage of someone's ignorance. I don't like it any more than you do. I think it diminishes us. Even from a business standpoint I think it's foolhardy. Extracting money from people who ultimately will go bankrupt is not a sustainable business plan. We saw it with the sub-prime loans. We'll see it with the credit card and overdraft business as well.
Re: Chase's overdraft fee scam
That is the exact reason some not all but some banks are being squeezed, you have a guvment bent on class warfare demanding ninja mortgages be issued then they freeze all foreclosures forcing said banks to carry dead assets while the poor ignorant fools live in houses without paying. WOW!
So these poor ignorant fools are not responsible for their actions?
That is the exact reason some not all but some banks are being squeezed, you have a guvment bent on class warfare demanding ninja mortgages be issued then they freeze all foreclosures forcing said banks to carry dead assets while the poor ignorant fools live in houses without paying. WOW!
Re: Chase's overdraft fee scam
I would like to see how all the people protesting bank abuses would behave if they all got together, pooled all their own personal assets, and formed their own bank. Then we could see how things would work out with their being all nice and compassionate to each other after bouncing checks and overdrafting their ATM cards.
I would like to see how all the people protesting bank abuses would behave if they all got together, pooled all their own personal assets, and formed their own bank. Then we could see how things would work out with their being all nice and compassionate to each other after bouncing checks and overdrafting their ATM cards.
Re: Chase's overdraft fee scam
Wow . . . That's a bit heartless.
Some folks have gambling addictions. Some as bad as alcohol addiction. If they have to turn to the local Loan Sharks for money because PayDay offices are shut down, then yes; they will indeed end up in a dumpster. Then some homicide detective has to go to the addict's home and tell his wife, mom, children, or other loved ones that they found him in a dumpster.
As bad as PayDay offices are, someone's loved one won't end up in a dumpster if they fall behind.
Wow . . . That's a bit heartless.
Some folks have gambling addictions. Some as bad as alcohol addiction. If they have to turn to the local Loan Sharks for money because PayDay offices are shut down, then yes; they will indeed end up in a dumpster. Then some homicide detective has to go to the addict's home and tell his wife, mom, children, or other loved ones that they found him in a dumpster.
As bad as PayDay offices are, someone's loved one won't end up in a dumpster if they fall behind.
Re: Chase's overdraft fee scam
I just want to thank the the staff for allowing us this leeway and those who have been conducting a sensitive and impassioned debate with respect.
I don't mean to sound harsh in my posts but truth be told I am harsh, but I want to say that I respect all who have taken part even if we don't see eye to eye. :thumbsup:
I just want to thank the the staff for allowing us this leeway and those who have been conducting a sensitive and impassioned debate with respect.
I don't mean to sound harsh in my posts but truth be told I am harsh, but I want to say that I respect all who have taken part even if we don't see eye to eye. :thumbsup:
jtr1962
Flashaholic
Re: Chase's overdraft fee scam
The way things work now if you go one cent into default it could easily trigger hundreds of dollars in charges.
All that being said, if someone knowingly and habitually counts on overdraft to cover their bills, then they deserve every fee the bank charges them. My only sympathy is with the person who falls a few bucks short once in a while either due to oversight or just plain not making enough.
Really, my beef isn't about banks charging high fees to cover their risks loaning money to bad prospects. They're entitled to do that, no arguments. Rather, it's the fact that they enable fiscal irresponsibility by making these loans in the first place. Covering an overdraft of a few dollars once in a while is one thing. Covering for people who overspend daily is quite another. Like I said earlier, many only learn fiscal responsibility when the money tap is turned off. Same thing with a gambling addiction. If you're out of money and nobody gives you any more, it's pretty hard to gamble.
And guys, can we please tone it down a bit? This class envy stuff has nothing at all to do with anything. Remember that this thread was initially about some issues with my mom's checking account. In the end I found out the bank hadn't charged the fees I thought it did, so if anything the experience actually improved the way I see banks. Nevertheless, I also realize after researching the subject that many don't have as positive an outcome.
It's important to see both sides. Occasionally people make mistakes. This is what happened to my mom. We found the checkbook for July. Turns out after her balance was close to zero she called the bank on the phone, and wrote the available overdraft protection ( around $2100 ) as her balance. She knew she was working with overdraft at the time, and likely had intended to add enough to the account soon to bring it into the black. Unfortunately she carried the balance forward into the next checkbook in August, somehow forgot she was working with overdraft, and that brings us to today. She was NOT in a good frame of mind at the time just coming off the hip surgery. I probably should have been more vigilant and double-checked her finances but I didn't. I had issues of my own at the time ( business, running errands for my mom, and lack of energy issues ). So that's the story. One big mistake in over 30 years of keeping a checkbook. I'm just glad the banks didn't take her to the cleaners for it. That's really how I expect banks to be. Don't throw the book at someone first time they screw up. If they do it repeatedly, then hit them with whatever fees or penalties you want. Lesson learned for my mom ( and me ). I'll be more vigilant of her finances. She'll make sure to know whether she's working with overdraft or her own money.
I don't think GL is saying you should live beyond your means. Rather, when you're on the low end of the income scale things are very tight. Through error or even occasionally necessity you might end up trying to spend more than you have. Instead of the bank declining the purchase they let it go through, then reorder other transactions made prior to the transaction resulting in default so as to collect the most fees. End result is that a person who may have only been short $5 now has to contend with $175 in fees, putting them in the hole before they even get their next paycheck. In this day of instant electronics funds transfer and automated calling, why can't the bank give the customer an automated call if their account is in default, and give them until the close of the next business day to deposit the defaulted amount before charging fees? Perhaps charge a fee of a few dollars for this service to cover their expenses which also must be deposited along with the defaulted amount? At least this way the customer is given half a chance to fix things. If they choose not to, well, here come the fees.
The way things work now if you go one cent into default it could easily trigger hundreds of dollars in charges.
All that being said, if someone knowingly and habitually counts on overdraft to cover their bills, then they deserve every fee the bank charges them. My only sympathy is with the person who falls a few bucks short once in a while either due to oversight or just plain not making enough.
Well, my answer is the bank never should have loaned money to these people to begin with. And if the government forced them to, then that same government should be willing to cover the bank's risks making loans to bad prospects.
Really, my beef isn't about banks charging high fees to cover their risks loaning money to bad prospects. They're entitled to do that, no arguments. Rather, it's the fact that they enable fiscal irresponsibility by making these loans in the first place. Covering an overdraft of a few dollars once in a while is one thing. Covering for people who overspend daily is quite another. Like I said earlier, many only learn fiscal responsibility when the money tap is turned off. Same thing with a gambling addiction. If you're out of money and nobody gives you any more, it's pretty hard to gamble.
And guys, can we please tone it down a bit? This class envy stuff has nothing at all to do with anything. Remember that this thread was initially about some issues with my mom's checking account. In the end I found out the bank hadn't charged the fees I thought it did, so if anything the experience actually improved the way I see banks. Nevertheless, I also realize after researching the subject that many don't have as positive an outcome.
It's important to see both sides. Occasionally people make mistakes. This is what happened to my mom. We found the checkbook for July. Turns out after her balance was close to zero she called the bank on the phone, and wrote the available overdraft protection ( around $2100 ) as her balance. She knew she was working with overdraft at the time, and likely had intended to add enough to the account soon to bring it into the black. Unfortunately she carried the balance forward into the next checkbook in August, somehow forgot she was working with overdraft, and that brings us to today. She was NOT in a good frame of mind at the time just coming off the hip surgery. I probably should have been more vigilant and double-checked her finances but I didn't. I had issues of my own at the time ( business, running errands for my mom, and lack of energy issues ). So that's the story. One big mistake in over 30 years of keeping a checkbook. I'm just glad the banks didn't take her to the cleaners for it. That's really how I expect banks to be. Don't throw the book at someone first time they screw up. If they do it repeatedly, then hit them with whatever fees or penalties you want. Lesson learned for my mom ( and me ). I'll be more vigilant of her finances. She'll make sure to know whether she's working with overdraft or her own money.
Thank you and I do see where you're coming from. Differences of opinion are why forums exist. Everyone here has kept it fairly respectable for the most part. I wrote the "can we please tone it down part" above prior to reading this but I thank you now for your above words. Let's use this thread as an example of how we can discuss controversial material while still remaining civil to each other.
jtr1962
Flashaholic
Re: Chase's overdraft fee scam
Sorry if this comes across as heartless. It annoys me on many levels when someone's bad habits are enabled, whether by banks or Payday places or loan sharks or family. If I found a person this desperate who needed money, I might ask them what they needed the money for. If they said rent or food, then I might say, fine, I'll go and pay your rent for you, or go to the store and buy you food. But there's no way on Earth I'm handing that person a dime. They obviously can't be trusted to manage their money. I'm not helping them get deeper into the hole by giving them money to gamble away. Until they conquer their addiction someone else who can be trusted should handle all the money.
Re: Chase's overdraft fee scam
They wrote fannie and freddy a blank check on Christmas eve, they protect the quasi-guvment end while squeezing the truly private banks.
In that spirit perhaps you should rename this thread, do you still feel you were scammed?
Thank you and you are welcome.
jtr1962
Flashaholic
Re: Chase's overdraft fee scam
The second and more interesting part was and is a discussion about overdraft fees in general, not just those applying to Chase. I think changing the first part of the title might cause people to lose track of the thread, so I simply added "now resolved but interesting discussion" after it.
I was thinking of doing this. The thread has taken two directions. The first was about the issues with my mom's checking account which have been resolved to my satisfaction, and I noted that I considered the fees reasonable. That part is known pretty early in the thread ( post 19 specifically ). I edited the first post to note the situation was resolved, and linked to post 19.
The second and more interesting part was and is a discussion about overdraft fees in general, not just those applying to Chase. I think changing the first part of the title might cause people to lose track of the thread, so I simply added "now resolved but interesting discussion" after it.
:thumbsup:
Re: Chase's overdraft fee scam
Agreed.
I know of folks who'll hand gift cards to fast food places when the Homeless ask them for money to get something to eat. You'd be amazed how often they refuse to take the gift card, or even become angry at the person trying to give it to them.
Food and rent is one thing. Money to just hang out and drink with friends is another. Gambling falls into the latter category. But paying off a Loan Shark to prevent a severe injury; that's a bit harder to gauge. Definitely a grey area. Perhaps a beating will cause some addicts to finally wake up and get help. But with a Loan Shark, there's no telling how far he'd be willing to go.
Agreed.
I know of folks who'll hand gift cards to fast food places when the Homeless ask them for money to get something to eat. You'd be amazed how often they refuse to take the gift card, or even become angry at the person trying to give it to them.
Food and rent is one thing. Money to just hang out and drink with friends is another. Gambling falls into the latter category. But paying off a Loan Shark to prevent a severe injury; that's a bit harder to gauge. Definitely a grey area. Perhaps a beating will cause some addicts to finally wake up and get help. But with a Loan Shark, there's no telling how far he'd be willing to go.
LowBat
Flashlight Enthusiast
I don't know if this was mentioned or not, but banks and credit unions are now allowed more time to hold deposits before posting them to your account. With my credit union it used to be three business days if depositing into a co-op ATM (I don't live anywhere near the few branches my credit union has so I regularly use the co-op network). Last year I find out the hard way the three business day hold was extended to five business days (basically 1 week). I'm told the additional waiting period is needed to crack down on check fraud. My deposit wasn't even a check, but cash, which I assumed could be easily verified and posted to my account. Instead I got an overdraft fee that my credit union was kind enough to reverse based on having a good history with them. Now I watch my account online daily and keep a minimum balance to act as a buffer in case there are anymore "minor changes" in how deposits are handled.
LowBat
Flashlight Enthusiast
Re: Chase's overdraft fee scam
Sorry for going off topic.
Doesn't amaze me at all. With some exceptions, most of those people are simply bums working the sympathy angle. Homeless, maybe, but that is a symptom of being a bum and not the root problem as we are supposed to believe. I was once asked for gas money by a woman who said she ran out of gas a few blocks away. I produced a full gas can from the back of my truck and offered to help. She gave me a dirty look, said forget it, and walked away. At a nearby intersection I regularly see a man holding his cardboard sign. He has a bicycle too, but I now see he hides it in the bushes as he now sports a pair of crutches. I suspect he fished the crutches out of the dumpster from the hospital a block away. I remember a contractor who handed out his business cards and an offer of work. He said not one ever shows up. I'm not without sympathy for those who are struggling to get by and need a helping hand, I just wish passing motorists would stop being so naive and hand out money. Hand out food or hand out a list of shelters or places to get help, but don't ever hand out cash!
Sorry for going off topic.
jtr1962
Flashaholic
Re: Chase's overdraft fee scam
Another thing my grandfather did when "blind" people on the subways begged for money was to go into his pocket as they were passing by. Needless to say, given how loud those old subway trains were, the noise of him fishing in his pocket was inaudible over the racket the train made. If the "blind" person stopped in front of him, waiting for money, he knew they were trying to scam people. It seems to be a cottage industry in NY where some people try to get the day's lunch money by begging on the trains while going to work. Granted, in some cases it's legit, but it seems to be more scam artists than genuine cases.
My grandfather told me stories like that. A homeless person would ask him for money to buy coffee, so instead he would offer to buy the person coffee. They always flat out refused. No surprise I guess as most also reeked of alcohol.
Another thing my grandfather did when "blind" people on the subways begged for money was to go into his pocket as they were passing by. Needless to say, given how loud those old subway trains were, the noise of him fishing in his pocket was inaudible over the racket the train made. If the "blind" person stopped in front of him, waiting for money, he knew they were trying to scam people. It seems to be a cottage industry in NY where some people try to get the day's lunch money by begging on the trains while going to work. Granted, in some cases it's legit, but it seems to be more scam artists than genuine cases.
kitelights
Flashlight Enthusiast
Re: Chase's overdraft fee scam
I've got to agree with the call for personal responsibility and accountability, but there are issues with some banks that are even beyond ethical, entering the realm of illegal.
Some years ago I had a CapitalOne credit card that I used for small amounts (like gas). Anytime that it was used, the balance was paid in full. Over about a two year period I had several late fees charged. I would call and they would reverse the charges. I adjusted the time that I made my payment (by mail) to make sure that even if the USPS screwed up, I would still be OK. I still got zapped with late charges and they told me that they would no longer reverse them.
I started to drive to the CapitalOne corporate office here in Richmond where they had a window to drop off payments. I still got late fees.
My calls were futile and I told them to go screw themselves. My account ended in arrears with an over $200 balance on an account that had been paid in full on time.
A few years later I was at the library researching Consumer Reports for a purchase we were making for my infant grand daughter (may have been a car seat) and I noticed an article in CR about a Class Action lawsuit involving CapitalOne.
It seems that one of things they were accused of was intentionally delaying processing payments that they had in order to create late fees and interest charges.
I've got to agree with the call for personal responsibility and accountability, but there are issues with some banks that are even beyond ethical, entering the realm of illegal.
Some years ago I had a CapitalOne credit card that I used for small amounts (like gas). Anytime that it was used, the balance was paid in full. Over about a two year period I had several late fees charged. I would call and they would reverse the charges. I adjusted the time that I made my payment (by mail) to make sure that even if the USPS screwed up, I would still be OK. I still got zapped with late charges and they told me that they would no longer reverse them.
I started to drive to the CapitalOne corporate office here in Richmond where they had a window to drop off payments. I still got late fees.
My calls were futile and I told them to go screw themselves. My account ended in arrears with an over $200 balance on an account that had been paid in full on time.
A few years later I was at the library researching Consumer Reports for a purchase we were making for my infant grand daughter (may have been a car seat) and I noticed an article in CR about a Class Action lawsuit involving CapitalOne.
It seems that one of things they were accused of was intentionally delaying processing payments that they had in order to create late fees and interest charges.
turbodog
Flashaholic
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