Bank of America and Wells Fargo used to (or still) have had a scam in overdraft fees.
You’ll have a deposit of 100 dollars on your current account.You have four charges in your account on the same day.
One for 90 dollars, one for 30 dollars, one for 10 dollars and one for 15 dollars.
Now you’d think that the 30, 15, and 10 dollars would be covered, and the only overdrafts (for 35 dollars) would be the 90 dollars.An overdraft fee of USD 90 will only be charged once.
No.You would charge it from the most expensive to the least expensive. That was the case that they could charge as much as possible of 35 USD (per overdraft fee).
So you would process the highest amount first.• 100 – 90 = 10 left. Then the 30 dollar amount, which exceeds the 10 dollar balance, will be charged 35 dollars for the overdraft.
Then the 15 dollars will be calculated.A further overdraft will be charged for usd 35.
Then the 10 dollars will be calculated.A further overdraft will be charged for usd 35.
Exactly the same fees in one day, all at the same time.This would have preferably only led to an overdraft penalty of USD 35 (only for the fee of USD 90) after the smaller amounts were covered.
but.Instead of just paying an overdraft fee for USD 35, you were charged USD 105 overdraft fees.
No overdraft fee for the first fee of 90 USD.
An overdraft fee of 35 USD for the 30 USD.
A further $35 overdraft fee for the $15.
A further $35 overdraft fee for the $10.
All fees processed on the same day?The difference in the account trick was between an overdraft fee of 35 USD and an overdraft fee of 105 USD.
There was a class action lawsuit over the practice and Bank of America had to pay.I remember getting a little cheque for it. Nothing compared to the hundreds of dollars I had to pay when they first processed the smaller dollar items.
Even the most reputable banking organisations can legally and openly commit ‘fraud’.For me, it is fraud, even if it is just an accounting gap, which seeks to draw as much as possible from overdraft fees.
Another trick was to process credits AFTER debits, so that a deposit of 500 USD was processed only after any fees were processed to generate overdraft fees if there was not a single one.
There must be a law that limits the amount a bank can charge.And if fair is fair, you should only be charged whatever the bank’s daily interest rate is while keeping your money for up to 3 days.
Everything is computerized.There is no expenditure (i.e. labour) on the processing of monetary amounts.