Posted by Colin Doyle, April 14, 2010
...or can you?
I have on several occasions had the misfortune of overdrawing my own account and frequently baffled as to why this might be, I looked into it a bit. Turns out Bank of America has a method to the "pending" madness that you see when you're logged into your online banking account. What the bank does is shuffle the larger transactions underneath the smaller ones. This, the bank claims, is done so that larger or "more important" transactions have a "better chance to clear".
...What the bank is really doing
Most people keep track of their immediate spending in their own heads, picturing it in chronological order. ATM withdrawls, debit card purchases, checks, etc. However, Bank of America shuffles your transactions around. Lets say you wrote a large check, and had made a series of small debit card purchases before the receipiant deposited your check. Instead of the check being returned (if you can't cover it,) it is shuffled back before the debit card transactions. Now each of those small transactions will result in a $35 overdraft fee. These really add up for the bank and have brought in almost 2 billion annually. Since you have no ability to see when your check might clear or where in your history of transactions it is going to pop up, lets just say you can count on it popping up in just the right spot to drag you negative and force all your minor transactions to result in separate fee's. Picture laughing capitalists smoking cigars made out of hundred dollar bills.
The days of switcharoo are coming to an end as banks are facing new regulations that limit their ability to rape their own customers. How unamerican. I know. But I wouldn't hold your breath for any real justice. These are the banks that brought us mortgage securitization and subsequently the end of the world. These new rules will only be a mere annoyance to them. Picture arch vilian waving fist and vowing to return.
More details HERE
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