How Banks INTENTIONALLY Rip Off Customers!
By
Staten Island, NY Posted: 3/15/2016 1:00:00 AM
Here's how banks use technology to intentionally boost overdraft fees.
I hate when I see companies intentionally doing things to take advantage of consumers, and this one in particular is an example of how not only one company, but an entire industry goes out of their way to rip off customers.
Here's the problem in a nutshell.
Let's say you have $500 in the bank, and you go shopping using your debit card.
First you buy something for $10.
Then you buy something else for $10
You then spend another $10 in 8 other stores.
All together you've spent $100 of the $500 in 10 different stores, leaving you $400.
On your way home, you have a problem with your car and you spend $500 to have it fixed.
Since you now have $400 in the bank, the $500 transaction is considered an overdraft, which you assume will cost you $35. In reality, the bank will charge you $350 in fees. How? By intentionally sorting the transactions of the day with the largest transaction ($500) first... therefore all 10 of your smaller transactions will be $35 each... or $350.
This is completely unfair. Banks shouldn't sort transactions with the highest amount first. This intentionally rigs their system to charge overdraft fees to all the subsequent charges.
By sorting the smallest amounts first, your total fees in the example above would only be $35, because only the last (largest) charge would've exceeded the balance.
While I don't think banks will be willing to play this fair... they should at least process the charges in a strictly chronological order. Rigging the system with larger amounts first is just plain wrong.
I originally wrote about this in October of 2014 in a topic called Banks Should Stop Inflating Overdraft Charges by Sorting Charges By Amounts By LOWEST First. It was one of the most popular posts on the blog, but unfortunately, banks are still ripping people off, so I felt I should bring it up again in my new YouTube Vlog Format.
Joe Crescenzi, Founder
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