An overdraft nightmare

Sept. 27, 2009

An overdraft nightmare

By Dominic R. Sondy 9/28/09

I’ve found that it is a good idea to check my bank accounts on-line every day. I have to look because there are some aspects of modern banking that I cannot seem to grasp. An example would be: Why are deposits some kind of shimmering illusion, floating in electronic limbo for days, while debit purchases are firm reality instantly?
Since the logic of this eludes me, it’s more than a good idea that I check daily. Checking means that I’m less likely to accidentally violate some arbitrary bank rule.
I skipped August 24 and didn’t log-on until late in the day on Tuesday August 25, 2009. That was the day I discovered $200 in Non-sufficient funds fees had been applied to our personal checking account. My wife and I had to talk with Mandy.
Mandy is the person. She thinks, and speaks, the Chase dialect of “banking” and translates capricious bank rules into every-day English. She is also the local bank manager and the only person with the authority to remove questionable fees. We’ve seen her several times. Mandy has removed a pesky little $20 “service fee” that haunts our account. She agrees that it shouldn’t be there. But even Mandy can’t make it stop showing up every month.
First thing Wednesday morning we explained to Mandy that last week, when we had made our most recent deposit into our business account (on August 20), a teller offered to link our business and personal checking accounts. We had made the deposit into our business account the week before and, even with the “float,” it had become available on the same day the overdrafts hit our personal account. The clerk offering the link had said that this new link would automatically transfer funds from one account to the other. This new link would eliminate the need for some transfers as well as the possibility of overdrafts.
Mandy didn’t think one of her tellers would have said this. She explained that such a link just wasn’t possible and wanted to check with the teller (to hear what she had actually said). Mandy never promised to remove the fees. While this matter was being investigated, Mandy suggested that it would be a good idea to transfer some money from our business account into our personal account. Mandy was optimistic and commented that our swift reaction had kept even more fees from being added. I followed her suggestion and transferred $625 from our corporate account to our personal account. That amount was more than enough to cover all the checks and fees to that point. It wasn’t enough.
Mandy called on Thursday, August 27 to say that we had misunderstood the clerk. The teller, in a gesture of good will, had simply removed that pesky monthly “service fee.” The NSF fees would stand.
On Friday, August 28 I discovered that an additional $150 in Non-Sufficient Funds fees had been applied to our personal account.
A phone call to Mandy revealed that these additional fees were being posted on Wednesday (as we were talking with her about the original $200 in fees) and she had no way to know about them at that time. We had to pay up again. I transferred an additional $225 into the account. This amount covered the NSF fees and left a small positive balance. It still wasn’t enough.
On Monday, August 31, yet another $35 NSF fee was charged to our personal checking account. Despite two consecutive waves of fees, an overdraft opportunity had been missed. Chase had held back a NSF on a $19 pizza purchase and saved it until I thought that the coast was clear. They had paid the pizza parlor. However, making that $19 payment gave our personal checking account a negative balance of three cents. That negative three-cent balance generated one more $35 NSF fee. Our checking account balance was negative – $35.03.
I visited with Mandy again, offered to pay the three cents and close the account. Mandy refused my offer. She said that I had to pay $35.03. The latest NSF was irrevocable and the account could not be closed with an outstanding balance. Mandy assured me that no further fees would accumulate on this account. The bank manager further explained that the account would close automatically in 30 days. I left the bank. The matter had not been resolved.
J P Morgan Chase had taken $350 in fees in just one week and demanded more money. The bank was relentless in its determination to take every last cent I had. The money I had budgeted to pay my Chase credit card was gone. After taking the money designated to pay their credit card they came back and took enough to pay for two week’s worth of groceries as well. A chain reaction had started, and it seemed Chase would not be satisfied until I was living in the back of my van. My money was evaporating and no amount I could transfer into my account would ever be enough!
I received a “courtesy call” from J P Morgan Chase on September 11, 2009. My checking account was overdrawn; the amount was now $60.03.
They still wanted $35 for the three-cent overdraft, on a nineteen-dollar transaction, and had added still another fee because the account had a negative balance. The cascade of fees was overwhelming and endless. I read the caller this letter, explained that I had already paid $350 in overdraft fees and would not pay another fee for a three-cent miscalculation. Like Mandy, the caller could not cancel the fees, close the account or convince me that more fees would not be added in the future. However, she did give me an address, and a name, for my complaint letter.

POSTSCRIPT: On September 23, a Chase caller reached me and was as cordial as she was informative. After patiently listening to my story she explained that it would take sixty days for my account to close.
She mentioned the future blemish on my credit record and also said that, since the account would close with a negative balance, Chase would tack on one last $30 parting fee for a total negative balance of $90.03. Then came the big However. “However, I am willing to cancel all but $15 of the current amount of fees. You can pay J P Morgan Chase just $15, close the account and end these ‘collection’ phone calls.” I am speechless, astounded and tempted.
I still do not understand that thing about deposits that float or debits that materialize instantly. I do know that I deposited $850 into my checking account and Chase kept $350 in fees. Now for just $15 more, I can say it was a lesson learned and walk away. Tempting. What do you think the next caller will offer?

Mary Kay Bean, Chase’s media representative in Detroit, provided this respond to Sondy’s dilemma:
“We usually do not discuss individual customer situations because of the confidentiality of our relationships, but there are a lot of things that customers can do to manage their accounts. You can text your account, check it online, or you can tie a checking account to a saving account. Some tie their credit card to their checking account for overdraft protection. There are a lot of tools you can use.”