The other day when I got home, I saw a letter from my bank with what appeared to be a check inside. I ripped open the letter, and my suspicions were confirmed – there was a check for $87.50 in there. It never said what it was for, but I’m not going to complain when someone gives me 90 bucks – I’m going to take it straight to the bank.
While I did that, I asked the teller what the check could possibly be for, and he had no idea. He asked the manager and she couldnt really figure it out either, and they offered to call customer service for me and find out for sure. I told them that the origin was not that important, and just to put the money in my checking account. I had a suspicion that the funds were from a lawsuit that the bank recently settled about overdraft fees.
The manager then asked if I had overdrafts on the account at some point, and I said I had (I’ve had this account since undergrad) and she said that was probably the reason. Then she said “Well, it’s nice the bank is giving you money this time instead of the other way around”. I couldnt believe it, and I was about to be like yes, it is, except I got fucked out of this cash 6 years ago by you trying to squeeze extra fees out of me and reordering my purchases.
This was something that came out to congress in the aftermath of the financial crisis, and was also something that I had always suspected, but was unable to prove. The bank(s) reordered your transactions in their favor, so that you’d get charged more overdraft fees. Heres a quick rundown of how this worked:
You’ve got $100 in your bank account, and over the weekend, you buy some stuff. You spend 6 at happy hour friday, 45 at target saturday, 4 for a movie saturday night, and 5 for a 6 pack sunday, and 60 on home furnishing sunday as well. You’ve spent $115 total, but on tuesday when you log into your account, you’ve got a negative balance and you’ve been assessed 4 overdraft fees because the bank rearranged the chronological order of your purchases, taking the $45 and $60 purchase first, causing you the first overdraft (105 instead of 100 that you have), then the other 3 transactions, when instead you should have only had 1 overdraft charge (the $60 on sunday, because at that point you st ill had 45 left in your account).
Another one of those awesome bank tactics, that I used to blame on them (partially rightly) but could have been easier if I would have been able to control my spending then, like I can now.
Overall, I’ll take the money back, but I’d prefer not to get bent over a barrel in the first place.
readers: were you a recipient of any of these lawsuit settlements from the bank? If so, what for?
We never got a check so I’m thinking we didn’t have any overdraft fees to speak of. Which is a good thing. Still, that had to be nice to deposit that one
I think this is one of those things that you could use if you got it, but dont really actually want to get.
I not sure how it works but while I was working in the banking industry for two different major banks we were told something different. In the case above you are right a lot of banks rearrange the order of purchases but do so because they figured the largest payments are the most important. So say you have a 1000$, 50$, and 20$ payments all coming out. The bank looks at paying the largest as it could be your mortgage or car payment. The problem is that many banks use to pay them as they came in and a lot of people got upset when .69 candy bar clear instead of their mortgage. Not people complain when one large purchase clears and they get 5 overdraft fees.
Anyway as least you got 90$ to spend at the banks expense.
I remember in college, my boyfriend got slammed with overdraft fees because of this reordering. I’m going to have to call him (we’re still friends) and see if he got reimbursed too!
It’d be worth a look. I think most banks have settled by now, but perhaps not all have.
The only check I ever got from my bank was due to an incorrect assumption on a cost for my mortgage. They refunded me the difference.
I have only over-drafted once in my life, and the bank happily refunded me the fee when I asked.
that’s awesome about the mortgage, eric.
My wife received $10 for a settlement regarding her Keogh account. I have yet to deposit because it is only $10 and I think I will be near there next week.
$10 is better than nothing KC!
NICE! $87? Don’t mind if I do!
It was nice to get.
I would love to get money back from the bank! I hate all the nickel and dime-ing they do, having them send a check which basically says “we tried to take advantage of you, here’s your hard-earned money back” is awesome!
It was nice to get it back, but I’d rather have not been in this position in the first place.
I didn’t get anything because I didn’t overdraft. However, I do think the law that made banks change how they calculate overdrafts is stupid. Let the banks calculate them however they want and if consumers are smart enough they’ll only use banks that calculate overdrafts fairly.
I understand where you’re coming from kevin, but I never saw any literature on how banks processed transactions when I signed up for my checking account. If there was a place for them to do so, people would be able to choose, but my experience has been that they did not provide that information.
Nope, but now I wish I had gotten one!
Curious what bank it was…
Jeff,
Never under estimate the ability of the banking system to take your money. That is why they are there and how they stay in business. Banks understand that most people feel guilty about the overdraft and there by can get away with charging you hefty fee’s since it was “your mistake”. Banks are one of the few business’s that really grind my gears, they are like the new “lawyers” these days.
What do you call 100 bankers at the bottom of the ocean? A good start!!