Bank of America Overdraft Resolution
At the beginning of this week, I told you that I did a stupid thing. I initiated a bank to bank transfer in the wrong direction! I moved a few grand FROM Bank of America TO HSBC, but I meant to do it the other way. Part of this money was the extra money from my balance transfer to pay off our Chevy Malibu early.
-How banks sequence debit postings-
I had 5 total debits pending against the account, counting the transfer, and they were all set to post at midnight Monday. I was told I would be charged $35 for each overdraft, so I was hoping the big amount would post last (since it WAS the newest transaction). Bank of America, and most other banks, post the biggest amounts first. So, that caused FIVE overdrafts, not just one.
However, for some reason, BOA only charged me $20 per overdraft. Perhaps it’s because I’ve never had a problem with my account in the past? I don’t know why they chose to go against the $35 they kept telling me on the phone, but I won’t complain.
-How banks handle debit PLUS credit postings-
It took a full 3 days before the transfer FROM HSBC showed up as a pending transaction at BOA. Banks want to grab that money ASAP, but wait as long as they can to put it back. This morning, I saw I had 2 debits (Vonage and Bally Fitness) pending, as well as two credits.
I called this morning to ask Bank of America to reverse the overdraft charges, but I asked them whether those 2 debits would bounce. It turns out that Bank of America processes any credits before debits to your account. That means they put in any money before taking it out. Whew! Also, Bank of America didn’t reject the debits. They paid the amounts out of “their own pocket” Maybe that’s the benefit of having an account in excellent standing, even if I don’t keep much money there.
-How I got the overdraft charges reversed-
When I got through to a live person, I told the young-sounding nice lady immediately that “I did something stupid Sunday” and told her the brief rundown of what I did. I claimed responsibility for what I did, but noted that the mistake was the newest transaction, and had the amounts been processed in chronological order, the other 4 debits wouldn’t have bounced. I then asked politely if they would reverse the overdraft charges for all but one of the overdrafts. I didn’t want to be greedy.
She quickly agreed to credit the full $80 in overdraft fees from the 4 “bounced” transactions, and for some reason added $1 to make it $81. I asked why, and she said that’s what she is authorized to refund. Great! And, the money showed up in my account less than 30 minutes after the call.
So, now I have a blemish on my account and may not get such quality treatment in the future, but for now, I must commend Bank of America on their speedy response and customer service. I was expecting the worst, but I got native English speakers who were both pleasant and willing to help. Thanks BOA!
Try one of these related posts too!:
- The stupid thing I did today
- Beware the Almost Closed Bank Account!
- Opened a Bank of America Money Market Savings Account
- Clever Dude’s Week in Review Mar 11-17, 2007
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While your story of BofA’s generosity is very heartwarming, their “overdraft” system is a crafty scam in my opinion. Here’s why I feel this way:
I have two accounts with BofA that I manage using the same Online Access ID (I see and manage both accounts after logging in). One account “A” is where I keep the majority of my funds and the other “B” is from where I write checks, make credit-card purchases (card has a Visa logo), etc.
When I make a CREDIT purchase (not Debit) on a weekday (Monday-Thursday) using “B”, I transfer funds from “A” to “B” using http://www.bankofamerica.com that same night. The snafu is, for my location, I need to make such a transfer BEFORE 10:45pm “cut off” for some unknown-to-me reason, or the funds will NOT hit the account in time to cover the credit transaction. In that scenario, BofA will charge me $35 PER transaction that it now considers in overdraft.
On a side note, their transfer confirmation page does NOT bother to list their server’s current time for your records (eg: a print out). I find that equally as frustrating, since you would have NO proof to refute a claim that you did indeed transfer before their “cut off” time.
Why question is WHY would my transfer from “A” to “B” — two BofA accounts BOTH managed by my one Online Access ID — not be INSTANTANEOUS? The funds are MINE already (not from a recent deposit), so why not just consider the funds instantly moved when I do an online transfer (even if the physical funds still have to go thru a wire-transfer or similar process the next business day)??
I firmly believe that this is a HUGE money maker for Bank of America; to scam extra cash from their customers who are less fortunate, living paycheck to paycheck thereby keeping a low average balance.
Again I say, if the funds are already in my account “A” and I transfer them online to “B”, why is that not immediate REGARDLESS of the transfer time?
I am exploring other banks and their policies at this time.
West, I didn’t think of it like that. I did notice that it wasn’t instantaneous, but never considered why since it didn’t inconvenience me. However, I agree that it’s probably a scheme by BoA to make more money, but if you find someone else that doesn’t do transfers the same way, then let me know!
I am not sure how other banks do it but this whole “overdraft protection” item at Bank of America is a money making scheme.
In the old days it was a loss for banks to deal with accounts going below $0.00 on the account balance and overdraft protection was created. This was an inconvenience but banks would transfer money for you from another account. This was so accounts would stay in positive numbers, checks would not bounce etc.
However these days everything is automated and there is no inconvenience to the bank whatsoever. Let’s say you have $10,000 in your savings and your checking goes below $0.00, the computers transfer money from your savings and charge $10.00 for every debit below $0.00…AUTOMATICALLY. So essentially the bank has no loss and inconvenience and yet they still charge these fees. See an actual example below:
11/29/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER CHARGE
-$10.00
11/29/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER -…
-$25.00
11/28/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER CHARGE
-$10.00
11/28/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER -…
-$140.63
11/27/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER CHARGE
-$10.00
11/27/2007 SAVINGS OVERDRAFT COVE
RAGE TRANSFER .
-$1,111.76
This can amount to hundreds of dollars very quickly if you are not aware of it.
THIS IS OUR MONEY THEY ARE TAKING FROM US. Bank of America and many other banks are making millions of dollars off of these worthless penalty fees and sadly most of this money comes from people who really need it…people who don’t have 10k sitting in their checking account.
In my opinion this is not about managing a checkbook. If you have enough funds and you do not want to manage your accounts you should not have to just for the sake of avoiding senseless fees.
I prey one day there are class-action lawsuits against these banks and the customers get some of their money back.