I opened a new checking account last May at Huntington Bank. I have liked the account and never had any fees, problems, or issues.
I have heard about the new legislation where consumers now have to "opt-in" for "overdraft protection" for transactions on their ATM/debit card. I didn’t really know what that meant. I just always figured if you didn’t have the money in your checking account, the transaction would just be declined. Made sense to me. Well I was called last week asking if I wanted to “opt-in” to the overdraft protection which means that I won’t have those “embarrassing situations” when a charge is declined due to no available funds and the “bank is there to protect me” and I have “24 hours to put the money back into my account” to cover any negative balance and I will “never be assessed a fee.”
Well here is what happened. I rarely use this card/checking account but set it up last May because they sent me one of those free $100 offers if I signed up for a new checking account and put money in it every month by direct deposit. So I put in $100 a month and don’t really use this account much.
Last Friday I had a balance in the account of $45.55. Over the weekend I made a few purchases:
$10.00 – entrance fee (for 2) to a bar/club – balance now = $35.55
$7.80 – late night Taco Bell (bad, I know) – balance now = $27.75
$8.59 – gas station, don’t remember what – balance now = $19.16
Now here is where it gets interesting. I went to the drive-thru for beer (yes, we have drive-thrus for beer in Ohio) at Macadoo’s, where I have been going for well over 8 years now for beer. The beer after tax was $6.59. She ran my card and came to me with the little clip board to sign and the receipt showed $65.90. She obviously mis-keyed the transaction amount and added a zero at the end. Now in the old world, this would have just been declined, she would have noticed and then ran it for the correct amount, which would have been approved and brought my balance down to $12.57. But because I now have this amazing protection from the bank, it ran through and made my account negative (pending transactions only, nothing has posted to my account yet – it’s the weekend). I noticed the amount was wrong on the receipt and I told her so she cancelled the transaction and printed me a receipt for the right amount, $6.59.
On Monday I still showed an account balance of $45.55. However I had 5 pending transactions:
Bar/club - $10.00
Taco Bell - $7.80
Speedway - $8.59
Macadoo’s - $65.90
Macadoo’s - $6.59
So on Monday night/Tuesday evening, even though only the four legitimate transactions were presented for payment, they still deducted that $65.90 from my available balance, which I guess is now what they are using to determine if you overdrew your account.
So they took the largest amount first (even though it was a cancelled transaction, I never signed for it, Macadoo’s never presented the amount for payment) and deducted it from my account. So my balance now equals ($45.55 - $65.90 = -$20.35)
So then they charge me $37.50 each for the other 4 transactions totaling $150.00 saying my account was overdrawn when the 4 items were presented for payment, even though ONLY the 4 legitimate charges were – the $65.90 was NOT. They assess these fees on 2/15/11, however if you look at my account ending on 2/14/11 (actual balance – ignoring that pending/incorrect transaction), it shows they paid all 4 VALID transactions and my true/real/posted account balance never went negative. It did not go negative until after they posted the $150 in fees on 2/15/11.
So my question is this… how can a bank say you overdrew your account on a transaction that will never be presented for payment, was never presented for payment, was cancelled by the merchant, and never posted to my account?
Had I never opted in to the “overdraft protection” they would not have allowed my balance to go negative when she accidentally overcharged me and I wouldn’t have been charged $150 on 4 charges totaling around $30. The transaction would have been declined and the merchant would have noticed – keyed in the right amount – end of story.
The overdraft protection is a scam. It is just a way for the banks to now be able to legally assess you fees. Think about this if you are thinking about opting into this service. It is just a way for banks to make money by bypassing the law Obama signed in July, 2010 to protect consumers from this very thing. By now “opting-in” you are really just allowing banks to manipulate your account as best they can to get more money out of you in outrageous fees.
Oh, and about getting those fees back (the erroneous $65.90 did drop off my account and was never presented for payment), the bank is telling me that it is the merchant’s fault and I have to take it up with them. I doubt Macadoo’s is going to give me $150 for an honest mistake/transaction that she did cancel on their credit card machine and they never presented to the bank for payment. It just still (to the bank’s benefit) sat on my account as a pending charge that they used to deduct from my available balance even thought it was never a valid charge so they could say I overdrew my account – which I never did.
Please pass this on so others are aware of what the banks are up to….
Todd Eckstein
Battelle Memorial Institute
Information Management
505 King Avenue
Columbus, Ohio 43201
[email protected]
614-424-7085 ph / 614-458-7085 fax
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