Even if you opt out, banks will get their overdraft fees

Last week, The New York Times had an insightful op-ed entitled "The Debit Card Trap." I know what they're saying. There are days I feel like my bank is a hunter, and I'm the witless animal who has just stepped into the snare trap.

The latest possible trend in banking, and I use the word "possible," since I don't yet know if we can call this a trend: banks appear to be changing the way they return checks that bounce.

Again, I just have seen this at my bank, the name of which I'd love to mention, but then I keep picturing an identity thief reading this and having fun with that bit of information and attempting to somehow use that to their advantage, so I'll just say that I use one of the big, shiny, brand name banks. Why I still do use this big bank and haven't switched entirely to the smaller credit union that I also belong to is beyond my comprehension. Still, one of these days, they'll push me far enough, and I'm sure I will.

Anyway, I decided about a month or two ago to ask my bank to let me opt out of their overdraft protection program. I've read numerous times that these banks offer overdraft protection as a service. A few weeks ago, for instance, a spokesperson for a Washington, D.C.-based credit union, that has this "service" told USA Today that the overdraft program is a "safety net. We look at it as a tool just to assist [customers] as needed."

Riiight, and thanks so much. But in that spirit, I told my bank that I wanted out of their overdraft protection "service," and I was told that they couldn't help me there. If I'm going to use my debit card, I'm going to use their overdraft protection service. That was interesting to hear, but somehow not shocking.

So I asked about checks. I don't write many of them these days, but I write a few, and so I told them that if the funds weren't in my account, that they should send my check back to the store or wherever I wrote it for. It's not that I don't want a store to get their money -- but I don't want my financial institution taking advantage of the situation and body slamming me with a barrage of bank fees.

The assistant bank manager told me that they could help me out there and return checks if the funds weren't there to cover them. I said that would be just fine.

Well, clearly, it doesn't pay to be too cute with your bank. Earlier this week, as the clock struck midnight, and the day turned from Tuesday to Wednesday, my bank had money that had been direct deposited into my account -- for simplicity's sake, let's say it was $500 -- but, of course, they held that. And the bank computer (I'm told it's a computer) looked and saw that I had a check coming through -- for simplicity's sake, let's say, $200 -- but there wasn't the money to cover it.

Now, a reasonable bank or credit union would put my $500 into my account and then run the check through. I know from experience that my big, shiny bank won't do that. But I would have expected them to see that there wasn't enough money for the $200 check -- and to send the $200 check back to the store and give me a non-sufficient funds fee.

Instead, they ran the check through my account tot, collected several overdraft fees totaling over $200 -- and then they sent my check back, and of course, lodged on a non-sufficient funds fee, worth $37.50, on top of that.

Then they dumped my $500 into my account, minus all of those fees, of course, which pretty much meant I was left with next to nothing.

When I surveyed the damage in the morning, I was livid, of course. Later, I spoke to my bank manager, who I kind of feel sorry for. She seems like a lovely person, and I'm sure it's not fun for here to be on the receiving end of customer anger. So I kept it pretty cool, making it clear I was upset without berating her, and we talked for about 20 minutes. In the end, I was able to get two fees wiped off the slate, but I was still left with five, including the non-sufficient fund.

But what I found interesting was that this bank has only been running the checks through, collecting overdraft fees and then sending them back for about a week now. It's a new policy, she told me, and supposedly I was sent this information in the mail. Maybe, although I have absolutely no memory of seeing it. In any case, I stopped by my bank and picked up a "deposit account agreement," a 54-page booklet that she said was just printed and saw nothing that indicated this new rule.

The New York Times Op-Ed that just ran stated, "Federal regulators who stood idly by while this system evolved are considering new overdraft rules that could provide more transparency. If they do not move quickly and aggressively to protect consumers, Congress should step in."

I would second that, and if Congress ever does decide to hold hearings and wants to hear from disgruntled bank customers, I'd be happy to volunteer. And in that case, believe me, I would be more than happy to reveal the name of my bank.

Geoff Williams is a regular contributor to WalletPop. He also is the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
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