February 26 2009|01.59 PM UTC

Stan Reybern

How Banks Snatch Almost $2 Billion From Us Yearly

Category: UncategorizedTags: , , , ,

Many consumers have had the unpleasant experience of overdrawing their bank account.  By delaying deposits and funds transfers for reasons unknown and offering up confusing and contradictory figures for available balance, it sometimes seems as though the bank wants to catch you with insufficient funds. With hefty charges attached to each micro-loan the bank gladly offers, you are left wondering why these overdraft programs are so mysterious, and how you got into them in the first place. This chart sheds some light on the incredibly profitable bank practice of offering automatic overdraft “protection.”

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{ 47 comments… read them below or add one }

Bruce Hornicker February 26, 2009 at 2:12 pm

Very nice, informative, grabs attention, A++

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diana dietrick February 26, 2009 at 3:22 pm

Banks are taking advantage. I was charged $48.00 for an $0.86 overdraft and notified it happened by mail a week later. When I spoke to the bank about the rediculous charge was told their committee had decided since it was my fault that was too bad for me.I hear stories like this all the time.
you can save more money if you only use a checking account when you have to.

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Dan February 26, 2009 at 2:57 pm

Besides overdraft fees, how else do you expect them to pay their employees? My bank charges $25 for an overdraft. I do have overdraft protection and i am stupid for not using it, but it is what it is.

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Jason February 26, 2009 at 3:48 pm

Wondered why I always felt like I was getting screwed in the wallet.

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Marc Beharry February 26, 2009 at 4:04 pm

I say we completely overhaul the entire banking and financial systems.

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justin anderrson February 26, 2009 at 4:23 pm

This is true. Want proof? Visit http://clossonsettlement.com/ to see the details of the class action suit against BoA

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Chris February 26, 2009 at 4:44 pm

My credit union charges a $4 fee if I overdraft and takes it from my savings. The fee just recently went up from $2 :(

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atlanta February 26, 2009 at 4:50 pm

needless fees are bleeding the people dry. Every company said if everyone gave me a dollar I would be rich. They were right but now were all broke. Surcharge this and surcharge that. You can’t even open your phone with out hitting the web button that is placed in a spot to make sure you hit it by mistake. costing you 25cents plus they paid 200,000 they spent to find out that was the most common spot for people to reach on there phone while opening. Honestly how many of us have had to call a local service company because they were wrongly charged. You pay 3,000 for a coach cause they just sold the same coach with no payments for 3 years. Honestly who is going to start to pay for there old beat up coach 3 years later. Very few people which is why you pay 3,000 cause they just gave a great deal to 5 people who are never going to pay for the coach.

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Diane February 26, 2009 at 5:05 pm

I like the graphs. Yes, some banks are fee happy. It pays for all the freebies that they give to people; free checking, free ATM transactions, etc. But, when it is all done and said, people need to balance their accounts. You don’t need to wait for your account statement; there is on-line banking, telephone banking, and for those who can communicate with a human, customer service personnel that most banks still have.

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Russell August 29, 2010 at 10:29 pm

How about banks manipulating the transaction order by paying the highest transaction first, then allowing 4-6 small transactions to go though and charging you like $34 for each over drafts, or banks delaying deposits, so banking online may not be the exact balance,

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broke as a joke February 26, 2009 at 5:25 pm

Wow, great stats. I am definitely one of the victims of this scam, what a joke

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Wojciech Kulicki February 26, 2009 at 5:56 pm

Wow! On the one hand, that is nuts. On the other hand, most of the time we do it to ourselves (myself included) because we’re careless with our accounting. I agree that sometimes it’s the bank’s “fault” by not depositing quickly enough, or whatever the case may be. It’s certainly in their profitable interest to do so. By being a little more careful and building up a small reserve, I think we can avoid most instances of overdrafts.

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don't be dumb February 26, 2009 at 8:47 pm

I’ll just keep spending every dime I earn. So I can get myself into these situations. Stop over drawing, duh.

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Drew February 26, 2009 at 9:30 pm

I belong to a credit union also, don’t think they’re any better. That $4 overdraft fee must be something you got lucky with… mine is like $25 or something. I overdrafted and they didn’t tell me about it for a week. I hate people who don’t actually do anything to make money.

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Tony February 26, 2009 at 10:00 pm

I’d rather pay $5 a month (every member) and get a more human approach to banking.. everything is so automated, nobody wants to change anything once it’s done.

Great info, I’ll be passing along!!

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Nikolai February 26, 2009 at 10:18 pm

My bank (Wells Fargo)offers overdraft protection using your savings account but still charges you $10.00, even though it’s YOUR MONEY used for the overdraft. With everything being automated, I find it hard to believe it costs them more than a dollar or so in providing this service. If so, thats 900% profit!

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Kirk Di Grazia February 26, 2009 at 11:24 pm

Hey don’t for get most bank always clear the biggest charge even if its the last thing purchased so all those small things you purchased before the biggest charge NSF for those too its lovely getting 200 in nsf for a couple transactions

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dj41326 February 26, 2009 at 11:26 pm

First we should look at the criminal activities of these banks that are trying to take over the United States and the world through globalization and one world currency. Read the Banker Manifesto of 1892. This manifesto basically explains how the bankers intend on keeping the “sheeople” asleep while they bankrupt currencies and break down borders. The apologist in this comments sections are probably paid operatives. The truth is that people might keep $30 in the checking and not realize that their spouse bought a pack of gum earlier that day with the check card and then on the way home from work the other bought $30 worth of gas on the same account. Well the bank will charge you $30.00 for the one dollar that you mistakenly went over when they could have just as easily declined your transaction and forced you to pay for the purchase in another fashion. Wake up people there is a war for your minds and until you realize what you are facing and take steps to correct your actions then you will continue to let your government and the banks that run it control you.

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FreedomIndia February 27, 2009 at 3:24 am

Dear Diane ,
You have claimed that banks offer freebies like free checking, free ATM transactions, etc.
But you want people to responsibily operate their accounts and state that banks are right in charging overdraft fees of $35/- to the unwary customer.
True.
But why can’t banks be responsible and stop offering free checking and free ATM transactions? People didn’t ask for those?
Charge a fee to operate the account, and send away people who demand it free.
Is it too hard for a bank to be responsible?

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Uncle B February 27, 2009 at 3:50 am

In the Post (GRD) great republican depression era, and after the astounding sociological paradigm shift the American people are about to go through is over, when all that remains of the U.S.A. we know today is written in the history books, and the “Post-Materialists” and their society dominate in the States, the world’s monetary system will be based in communist China, and the rules they will impose, “on pain of death” rules, will prevent the Banksters, Shylock’s and Shysters from ever rising to power again in the world. China already owns the U.S.A. lock, stock and barrel, and stands poised for an economic takeover of the U.S. and the world monetary system. They have conquered the mighty American Empire without firing a shot, without killing a single soul, and will go on to show the world how really smart they are, by taking over world trade, manufacturing, medicine, engineering and other major fields, including energy development and space dominance. China at the moment, has an army of more post-graduate students with IQ’s of 130+ than the U.S.A. has high school students – Fear This Yankee Doodle!

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Cesar Castro February 27, 2009 at 7:04 am

The graph looks great! Right now the Federal Reserve is taking up comments regarding this issue. They really want to know how people have been affected by overdraft fees and whether the explicit option to opt-in to such “protection” programs would be something useful for consumers. This might be the only way to end this “gotcha” bank fees once and for all. For more information or to send your comments go to tinyurl.com/stopgotchafees.

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frostnix February 27, 2009 at 1:30 pm

What about the other money they don’t want you to know.We all subsidize banks,that’s in the open,how about the dirty money even the media doesn’t ever mention?It runs in the billions if not trillions as well.

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crackgerbal February 27, 2009 at 2:41 pm

holy crap that is so not cool to over charge like that. No wonder they make so much money off of overdraft charges since many americans are forced to live paycheck to paycheck. hell it would be better off for a low income family with bad credit to not even have a bank account.

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JUSTaTHOUGHT February 27, 2009 at 2:48 pm

Why do you get charged to use an atm? They were built to save the bank money. Making it so you can access your money and they don’t have to pay someone 10.00 an hour to give it to you. Instead they pay a one time fee for a machine and that’s it they still have to have a place of business but they can do it everywhere for really cheap WITH THE ATM. Great great marketing idea love it who ever thought of it, way to go. But then an accountant came along and said “hey we should charge everyone 25 cents to use it they won’t care it is so little”. It worked so they raise the fee a few times AND THEN the people decide it is do much and STOP. Then bank instead of lowering the fee they decide, they need that money they started to DEPEND on that money so, instead of lowering the fee and trying to get there customers to come back. The banks just raised the fee over, and, over and, over. Marketing is great, and accounting is great but, you get the two in the same room with out ethics, we all get screwed in the wallets.

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duped again March 9, 2009 at 9:16 am

banks really suck

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BoA March 22, 2009 at 7:13 am

So you dont tell me what I can do to get out of the overdraft charges? I have like 5-6 of them on my account right now. The bank already gave me a break a few times.

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Chris March 26, 2009 at 12:12 pm

Do you have any resources against Bank to go after them and reclaim the overdraft fees?

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Big Al March 30, 2009 at 8:50 am

These startling facts were presented on 3/30 Today Show & everyone who wants to take a say (the easy way) should go to: http://www.federalreserve.gov and put your 2 cent worth in.

Personally, I have avoided ATM & overdraft fees throughout the years in many (pat myself on the back) creative ways. Years ago I used to keep an acct. at every bank that had an ATM convenient to me – NO bank was charging me to get my $. Later when Debit cards became THE card my bank sent me to “replace” my ATM card, I called & told them to cancel the debit & send me another ATM card. I DON’T BELIEVE IN DEBIT cards! They’re a recipe to screw bank customers over. If you are “hooked on debit” get a Visa debit card that isn’t linked to your checking acct. Often called: PrePaid Cards, you can recharge but never overdraw it. Use it up within the time frame prescribed so they can’t suck non-activity fees off your balance. Any vendor accepting it should be able to tell you the exact balance so you can use it & pay any extra in cash if it’s short for your total purchase. With online access, these are any easy & safe alternative. But if safety & convenience aren’t a factor, cash is KING! However, use a credit card for bigger$ purchases & return assurance. The free help in disputes is worth it to use.

As far as overdraft goes, I avoid that problem by being sure it does not happen. Since I have a “relationship” with my bank, I took their overdraft line of credit offering. In the unfortunate instance I should overdraw, they pay & the meter starts, but I’ve only had one instance to use it & it cost me a total of 83 cents (in interest), but no bounced check or overdraft fees were incurred. That was several yrs ago, and with all those little bill stuffers saying: Terms of your arrangement have Changed… please save this notice for future reference, no doubt the Bank has made this less beneficial to me & more profitable to them should I need it

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JeffGranger April 6, 2009 at 6:30 am

Yeah
I learned to keep at least $100 in checking with Wachovia and for heavens sake; don’t do ATM withdrawls except at their bank!
The minimum balance is because Twice they’ve bent me with a 20 second micro-loan for $35.00 ea. This happens when an automatic payment to some biller hits the bank twenty seconds before your direct deposit hits.

Call them and you’ll get your courtesy refund. I wonder how much they make from people who don’t complain.

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Jeremy April 7, 2009 at 7:17 am

This is a joke right? Its amazing how you can title a article and it totally changes people’s perspectives. It should be how the banking industry pays its employees by penalizing stupid people and almost providing a free service to smart people (cause these people cost them less money) Personally I think that is almost a flawless system but hey thats just me…

Feel free to post your own ideas about how it should work

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Atwas911 December 24, 2011 at 1:30 pm

It is close to flawless.. The flaw comes into play when the banks begin to abuse these fees, and then manipulate people’s balances in order to “trap” people into paying them..

I’ll use my most recent experience as an example..

I deposited a corp check into my businesse’s bank account (chase account). This deposit was several thousand dollars. Of course.. the check would require several days to clear. After the few day wait.. the check cleared and all funds were released to my account..

So I started paying bills..

A few days later.. after severl transactions, after the check had already been cleared.. The placed an “AFTER THE FACT HOLD” on the check, yanking the funds from my account, and causing the account to go into the negatives and ringing up all kinda NSF fees.. then just as easily as they took it out, it went right back in, just minus all the money that they deemed themselves worthy of in fees.

It wasnt until screaming at the top of my lungs in the crowded bank and threatning to drive a vehical through their bank and TAKING my money did the fees get removed..

I made sure to let them know that if anything like this ever happened again.. I would not be anywhere near this civil the next time.

These bankers are used to being able to RAPE at will.. You have to threaten them good. They rob people all day long every day..

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Benjamin April 7, 2009 at 7:30 am

And if you are worried about overdrafts, be your own accountant. Carry a little T account in your wallet. Every time you add money to your account put it on the left, every time you withdraw put it on the right, add the two totals and take the difference and that is your balance. And every month check your statement, if there is fees add this to the right side. These fees are an expense, they exist every where, if you think they are to high find a different bank.

And remember when a bank says a debit(left side of the t account) it is really a credit(right side of the t account) to you b/c on their statements its opposite. Ignorance is no excuse

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BillShrink Guy April 8, 2009 at 4:23 pm

Jeremy: Actually if you’ve read the other comments you’ll see that many people share one view and many others also share your view. A good approach to look at things is probably a level of consumer responsibility/accountability along with fair and reasonable fees from banking.

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DWS April 8, 2009 at 10:47 pm

The lesson? Learn how to track your balance and don’t spend more than you have. Never USE overdraft protection, even if you have it.

There really is no excuse for overdrawing your account, it’s called RESPSONSIBILITY which it seems these days is non-existant in personal, business, or government areas. Come on, people, NO one is FORCED to live paycheck to paycheck, many of your purchases are habits – bad habits – that are not necessary to survival. You don’t HAVE to have a new wardrobe every year, or even a new item for your wardrobe every day, or every week, or even every month. You don’t HAVE to eat out EVER, plan ahead, pack along your bulk bought, already prepared at home meal. You don’t HAVE to have cable TV, a new model car, or a house with a swimming pool, these are called LUXURIES for a reason.

Wise up and quit whining that “the banks make money because I screwed up and ‘overdrafted’” – which is a fancy word for spending more money than you HAVE. And the operative phrase here is “I SCREWED UP.” Notice that it was you who screwed up, NOT the bank. You expect someone else to clean up YOUR mess. Just like litter-bugs and GM, AIG, and BoA!!!

AND you expect a free ride. By forcing the banks to do a special transaction for you for FREE, then the banks have to increase a fee somewhere else and FORCE those of us who are RESPONSIBLE to pay for your stupidity! WAIT! Isn’t that type of thing what got the financial system in a mess? By the g’ment forcing banks to make things called SUB-PRIME MORTGAGES? To people who could make the grade to get a regular mortgage because their credit was lousy or their pay too low or their incapability in keeping a job? Other things that RESPONSIBLE people seem to have the ability to do?

How about living within your means? Not borrowing? Not creating monthly payments and becoming a slave to your debt load? This still doesn’t make sense to a LOT of you. Perhaps it’s the fault of the schools by letting calculators into the room while basic MATH is being taught??? I’m sick of the ads I hear about people borrowing up to the limit then using “special programs” to “reduce their credit card balances” by screwing the creditors. You agreed to pay back what you borrowed when you borrowed it and when it becomes inconvenient, just duck out of it. What a bunch of babies this society has become. ADULTS borrow what they can pay back, and RESPONSIBLE people who can’t pay their payments at least call and make a new affordable payment plan and pay back what they owe at a slower rate, and pay the cost of the interest WHEN they can, not IF THEY DECIDE TO.

People, RESPONSIBILITY is not an option to success, it’s a virtue for success and respectable.

You that want everyone else to carry your load are MOOCHERS, CON-ARTISTS, AND JUST PLAIN PATHETIC. You deserve a lot worse than a bad credit rating. I spit on you, look down on you, and KNOW that I am better than you. Get mad at me if you want, I care not what scum think of me.

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Bernie Boettcher April 15, 2009 at 12:37 pm

After listening to NPR this morning, the Banking system has only 8 trillion dollars out thier in loans. With two trillion being in toxic loans. If you take the amount of interest and principle on loans that are good, where’s the rest going ? The feds have also stuffed the banks with money to lend, where is it ? The bank fee’s are only a small portion of PROFIT. To me you are off setting your losses with these type of fees. I am in the Home mortgage Business and will continue to do so, helping people get thier dream. It still exists, its harder but still possible.
Need a Home loan in TN or GA or Alabama, I’ll try ! or at least put you in the right direction. bboettcher@norstarhomeloan.com THX !!

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ACH Acceptance April 27, 2009 at 6:13 pm

Love the graphic it puts it into perspective. Banks love insufficient funds. Stay away from overdraft protection for sure.

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Karen June 19, 2009 at 8:56 pm

And, let us not forget the money that is made by the institution who accepted the check that was declined. I accepted a check from a customer for a service rendered; the check bounced. My bank charged me $27 for the bounced check AND the customer was also charged $35.00 by their bank. I can’t believe it costs that much to address ISF. Sad thing was, the check was less than $1.00 overdrawn, most likely a simple mathmatical error in a tight time.

For the person above who asks why people don’t live within their means? Try being a single mother, working two jobs and raising two responsible children who view a game night with mom as their “date out”. Not every one who is stretched thin is irresponsible or spending beyond their means. MANY of us go without those luxeries you mentioned and are doing the best we can, which in these times is not always enough to keep food on the table and the bills paid.

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ATA July 5, 2009 at 4:15 am

This is for DWS… A little harsh, don’t ya think?
In reference to your long drawn out, “I am so responsible love myself speech”. I take it you have never had a streak of bad luck, lost a job due to lay offs, or had medical or family emergencies, or even death of a loved one that would cause such a cramp in your perfect little life. It’s hard enough listening to rude people like you, let alone one that doesn’t know a thing about life….
Nothing shows a man’s character more than what he looks down at…..

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B. David Mehmet July 8, 2009 at 5:00 pm

It’s called “re-scheduling scheme”. The majority of the banks are implementing it.

Read the FDIC report that came out in November 2008 explaining the scam. The banks are starting to be sued for this. In White v. Wachovia bank, the federal judge refused to dismiss the case. Wachovia settled the case. There are more lawsuits coming out.

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Margo Arrowsmith August 25, 2009 at 3:19 am

I remember the old days. If my parents inadvertently over drew the local banker would call them and ask them what to do, they would say, take it from savings and it would be done.

However, since Congress isn’t going to fix this, there is something we can all do.

If millions of people used their on line banking to write their payments for credit cards, six times a month…that would cost the banks on both ends. Kind of our way of charging them fees. Got credit card you never use? Send them $10. They will have to send you a statement every month, then refund you eventually.

Now, those things don’t cost them what they say, but they do cost. If millions of people did it every month, until they stop their deceptive practices…….

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MIKE September 26, 2009 at 11:14 am

Here’s a free tip…get a checkbook register and learn to use it. Is it the bank’s fault that you can not create a budget, stick to it, and keep track of your finances…no, it’s not. When you run your account into the negative, you are essentially using the bank’s money to fund your purchases, I don’t think it’s unreasonable for a bank to recoup their loss plus a profit in such a situation…isn’t that the name of the game?

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John Forbes October 22, 2009 at 6:27 am

I’m with MIKE. What has happened to personal responsibility? People should own up to the fact that it is their own fault the accounts get overdrawn not the banks. If you don’t like the fees don’t open the account!

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julius November 15, 2009 at 9:47 pm

I hear two sides to the story in most of the posts related to overdraft fees and I agree with both.
It is every persons responsibility to manage their money to avoid overdraft fees.
Large U.S. banks such as BofA, Chase and Wells Fargo have predatory overdraft policies. I hear you when you say you are pissed off! You can bank with an online bank +/- a credit union.

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Anonymous April 5, 2010 at 3:33 pm

citigroup are the worst banks to deal with they just dont care. They need to close

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Matthew Bonner July 14, 2010 at 7:16 am

If it’s not tax emptying your wallet it’s the banks.

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rh August 25, 2010 at 12:42 pm

Go into Chase – 50 people working inside how else do they get paid except by screwing us

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Mr J June 21, 2011 at 7:44 am

It’s wrong! Banks rearrange your funds and transaction order in the way that charges you the most in fees. The opt in/out program isn’t enough. The government needs to make it illegal for the bank to rearrange funds! I would have overdrawn ONE item, but my bank moved everything around until I had SIX overdrawn items! Hey US BANK, what’s $33.00 times SIX you thieves! Yeah, I got charged $198 in fees because of ONE gas transaction. Go to hell US BANK!

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