10 ms·

It's not just overdraft fees right? It's overdraft fees plus transaction reordering which makes the magic happen. I'm still kind of mesmerized on this one, it

It's not just overdraft fees right? It's overdraft fees plus transaction reordering which makes the magic happen. I'm still kind of mesmerized on this one, it felt like regulatory action almost happened, the most lucrative of the overdraft practices got limited circa 2009/2010, and then banks voluntarily toned it down and the regulators mostly looked the other way on things like reordering?

EdwardDiego 5y ago
Sounds like one of those "Look! We came up with a voluntary code of conduct, so your regulatory body can stop investigating necessary regulations, we've changed honest, so please feel free to have a triumphant press conference and congratulate yourselves without actually holding us to account."
numair 5y ago
Thanks for reminding me about reordering. There were (are?) just so many dirty tricks. It’s been a couple years since I’ve lived in the US, so I am not aware of what things look like now — hopefully others can comment.
rjzzleep 5y ago
What's transaction reordering? 1. have $10 in your checking 2. pay $9 for steak 3. fill account with $500 4. buy sausage for $2 bank reorders it as 1. have $10 in your checking 2. pay $9 for steak 3. buy sausage for $2 4. charge overdraft 5. count $500 deposit Is that what banks would do? I faintly remember that really old accounts I had in Germany had overdraft capability, but for all newer(last decade or so) accounts, I had to explicitly request overdraft. I guess it was inherently more user hostile in the US. Although in German its not because of good service, but rather because banks don't trust the consumer.
- steveklabnik 5y ago
  I left a comment about how this happened to me... 8 years ago, wow https://news.ycombinator.com/item?id=6424493 https://news.ycombinator.com/item?id=6424493
- AdamJacobMuller 5y ago
  The specifics of it are dependent on the bank, but it can be more insidious than even your example. Given a balance of $100 and 4 transactions of $20, $20, $20, $90 you can either be charged one, or three overdraft fees depending on the order in which your bank deducts those from your account. Basically, ordering from largest to smallest will cause the most number of overdraft fees.
  - NikolaNovak 5y ago
    I'm going to re learn the lyrics to Oh Canada and sing them joyously and thankfully... Our banking system gets a lot of ire but dear Gawd.
    - joecool1029 5y ago
      I seem to recall there being service levels at banks in Canada and maximum numbers of transactions per month until one gets hit with per-transaction fees. I was told explicitly when I opened my TD Canada Trust account there that it was imperative that I both keep money in the accounts and use them occasionally or dormancy fees would accrue (and if there was no money left, they'd then slam it with overdraft fees). The benefit of US banking despite lax regulation was that there's a ton of different banks and credit unions to choose from. Some are great and some are shit. Literally hundreds to pick from. Canada there was like 5 big banks, a large credit union, and then depending on your area there was maybe perhaps a small community credit union.
      - dsomers 5y ago
        Totally agree, the Canadian banking system is a corrupt cartel the levies it’s own tax on every Canadian. This was made even more clear to me when I moved to the Netherlands and every banking fee was suddenly 1/3 as much as in Canada for the exact same service.
        doikor 5y ago
        Here in Finland banking fees are a thing only for the poor (and even then we are talking about a total of 20 or 30 euros per year) Basically every bank has some kind of "premium customer" program that you qualify for by having enough investments or loans from that bank and magically all your banking fees go away (obviously they just make their money from the services they provide for your investments/loans)
- ryandrake 5y ago
  Yes, that's exactly what they would do. Even better (for the bank's profits) is if you had lots of other smaller transactions that day too. They would re-order everything from largest-to-smallest, so it's: 1. have $10 in your checking 2. pay $9 for steak 3. buy sausage for $5 4. charge overdraft 5. buy milk for $3 6. charge another overdraft 7. pay $2 for parking 8. charge another overdraft 9. buy a pack of gum for $1 10. charge another overdraft 11. count $500 deposit It was truly despicable behavior that benefited nobody but the banks.
  - beebeepka 5y ago
    Dear gawd. I've never heard of this shit before and hope it's not a thing anywhere else. Amazing it's all legal. That's the very definition of fraud
    - rootusrootus 5y ago
      I may be wrong, but I think this is now illegal in the US. I haven't heard of it in a while, at least. But it's also been some time since I left little enough in my account that it could happen to me, or banked at a shitty bank that would even do it to begin with.
      - plorkyeran 5y ago
        Banks "voluntarily" stopped doing it once regulators got serious about forbidding it and then the regulations never actually happened, so while it's not currently a thing anyone does it probably will be again some time in the future.
  - dntrkv 5y ago
    I know Chase and USBank always credited deposits first (going back to about 2006).
  - ikr678 5y ago
    What is the time period for reconcilling transactions? Is it reordering them per a 24 hour period? Or is every bank settling them differently.
- deleted 5y ago
  [deleted]
- klipt 5y ago
  Yes they reordered transactions to maximize their money. E.g. you have $495 in the account, and you spend: -$5: $490 left -$5: $485 left -$5: $480 left -$500: -$20 left, overdraft fee of $40, $-60 left. They will reorder it as: -$500: -$5 left, overdraft fee of $40, $-45 left. -$5: -$50 left, overdraft fee of $40, $-90 left. -$5: -$95 left, overdraft fee of $40, $-135 left. -$5: -$140 left, overdraft fee of $40, $-180 left.
  - Avshalom 5y ago
    And of course even if you deposited a check that day it wouldn't clear until the next business day so you'd pay a negative account balance fee for three days before your money hit.
  - Aerroon 5y ago
    Wow. Yeah, the bank employees involved in this should go straight to jail.
- Larrikin 5y ago
  I think it was more like 1. have $100 in your checking 2. pay $10 for steak 3. buy sausage for $5 4. Buy a ticket for $99 You think you get one over draft fee bank reorders it as 1. have $100 in your checking 2. Buy ticket for $99 3. buy sausage for $5 4. Pay 10 for steak Get 2 over draft fees. Add more transactions in between the ticket purchase to increase the fees.
- zaphirplane 5y ago
  This thread assumes intentional reordering not that the transaction arrive at the bank out of order I have transactions that show up out of order to the event time. Thou I wouldn’t put it past some smaller banks in low regulation geographies
  - desmosxxx 5y ago
    I think it's pretty well documented that intentional reordering happens and still happens
    - mdp2021 5y ago
      Should not that cause legal action - duly and factually?
      - organsnyder 5y ago
        Only if it's illegal.
        mdp2021 5y ago
        It's a scheme with the purpose of theft. You cannot have law as a list of specific cases: it must be based on patterns - "All arbitrary appropriation is forbidden and sanctioned", then further made into distinct categories to substantiate and differentiate the amount of gravity. All theft is illegitimate.
  - Arrath 5y ago
    When the transactions 'arrive' in the bank's system should be immaterial, as they should be timestamped at the moment the card is swiped, matching the date and time the printed receipt I am handed has. Regardless, the bank's mission is to make money, and they can make a lot more of it by adversely reordering transactions in their favor, it is not at all a reach to assume that they do so, and in fact have done so and may well continue to.
- brazzy 5y ago
  Germany here as well. I have never heard of event-based overdraft fees, only interest-based. Which makes this transaction reordering pointless
  - jmkerr 5y ago
    Because it's not true, check the largest consumer banks: https://www.postbank.de/dam/postbank/pdf/privatkunden/Postbank-Preisaushang-678-147-007-0621.pdf https://www.postbank.de/dam/postbank/pdf/privatkunden/Postba... https://www.deutsche-bank.de/dam/deutschebank/de/shared/pdf/ser-konditionen_preise-preisaushang.pdf https://www.deutsche-bank.de/dam/deutschebank/de/shared/pdf/... https://www.commerzbank.de/portal/media/efw-dokumente/preisaushang.pdf https://www.commerzbank.de/portal/media/efw-dokumente/preisa... https://www.hypovereinsbank.de/content/dam/hypovereinsbank/shared/pdf/Footer/Preisaushang.pdf https://www.hypovereinsbank.de/content/dam/hypovereinsbank/s... https://www.ing.de/girokonto/konditionen/ https://www.ing.de/girokonto/konditionen/ https://www.diebank.de/content/dam/f0032-0/PDF_neu/preisaushang-und-geschaeftsbedingungen/preisaushang/Preisaushang_11.08.2021.pdf https://www.diebank.de/content/dam/f0032-0/PDF_neu/preisaush... (Volksbank) https://www.ksklb.de/content/dam/myif/ksk-ludwigsburg/work/dokumente/pdf/preise-leistungen/preisaushang.pdf https://www.ksklb.de/content/dam/myif/ksk-ludwigsburg/work/d... (LBBW) In this sample, if overdraft is enabled, you pay up to 15% p.a., if disabled the cancellation fee is up to 2€ for the postal notice, but mostly just porto (0,80€).
    - deleted 5y ago
      [deleted]
- namibj 5y ago
  My German back account has overdraft, but that only charges via ~12% annual interest (billed at end-of-month, but charges proportionality if you've been in the red for part of the month). Also note that for ATMs (including deposits) and within-bank transfers, we had no more than a couple seconds latency since €, which got expanded for all willing banks to cross-bank push transactions specifically requested to be "SEPA instant push". The "SEPA instant push" transactions have some issues with reversing in case of accidentally fat-fingering IBAN (target account; like a crypto wallet address but no crypto) or amount. Once the money is in the target account, you basically have to go to court if it wasn't outright fraud. And being instant removes the window you had to call your bank and cancel the transfer. IIRC there are some further liability shifts. And yes, this transparent interest-based handling is why we get by perfectly fine without credit cards.
  - t0mas88 5y ago
    Exactly the same in the Netherlands. Didn't even know the Americans got screwed so badly.
eyelidlessness 5y ago
My last bank (US Bank, don’t bank with them) did this in a way where in one day where I had only one transaction which could overdraft they charged 6 overdrafts even though my net would have been positive. If I wasn’t (at the time) skilled at ~~kicking and screaming~~ advocating for myself I would have been out $180 plus whatever 30 cents they had calculated I went negative. Which (again at the time) was the difference between whether I was gonna be homeless.
- eyelidlessness 5y ago
  Oh since I’m naming names. The bank before that, Wells Fargo, honored a check I wrote > 2 years earlier. Sure, I wrote it and I was good for it at the time. I forgot about it. Maybe I could’ve left that money in limbo but at a certain point I assumed my moderately wealthy aunt wasn’t gonna cash it. Well it doesn’t matter what I assumed, the law said the check was no longer valid. When Wells Fargo honored it and overdrafted me they disregarded the law and said I was committing check fraud if I didn’t pay up. That’s how I ended up at US Bank, because fuck if I’m going to pay you for illegally processing my check. Edit: and yeah I had “check fraud” on my record for years after because Wells Fargo said they didn’t care about the law and just lectured me about being responsible for checks I wrote.
  - bagels 5y ago
    You got charged and convicted of a crime?
    - MereInterest 5y ago
      Not the OP, but having it on his record likely refers to his credit record, maintained by private agencies, not a conviction record.
      - rootusrootus 5y ago
        Probably ChexSystems. Kinda like a credit report, governed by the same laws, but distinct from the big three bureaus everyone is familiar with. All the banks use them. And anything negative on that report will prevent you from opening up an account somewhere else until you get it removed.
steveBK123 5y ago
The transaction re-ordering to maximize the amount of overdraft events should have put execs in prison. Out of all the obviously corrupt, mal-intent, direct consumer harming practices this was quite near the top.
- Foobar8568 5y ago
  In a French bank, I have credit transactions first then debit ones, in a Swiss bank, the contrary, I was shocked, especially that day, I did check my bank account to verify if I could proceed with a wire transfer, the following day, it shown a temporary minus amount but I didn't get an overdraft. So yes, fuck banks.
  - laurent92 5y ago
    In Australia in 2010 I got a debit card for the first time in my life. The card would simply reject transactions. “As should be”, I thought. It was a revolution for me.
    - devoutsalsa 5y ago
      Revolut, Simple, and Chime, the three online only banks I have tried, all do (or did) this. It really helped back when I was living paycheck to paycheck.
      - sueders101 5y ago
        For what it's worth; I banked with Simple for the better part of 10 years, but then they acquired by BBVA who was then acquired by PNC. That meant that all Simple customers had to go through account migration twice this year, and in the end now have all the typical fees associated with traditional accounts. Ultimately I decided to move to a local credit union.
        watersb 5y ago
        Yeah it's been a ride. I moved to One Financial, but I've kept a local credit union account as well. This probably makes no sense, but then again it's ok to feel conservative about banking. It's worked out for me so far. The local credit union is one block away. I have not used it but there are no fees to just park money in a checking account. I still don't know what happpens to such retail banking as interest rates go negative.
iskander 5y ago
I remember getting hit by reordering when I was in college, getting by on a coffee shop job. The bank ordered a group of concurrently unresolved deposit/withdrawals to maximize the overdraft fees (I think I got hit with ~3x $35). It seems silly now but when you're making $5.25/hr, going more than $100 in the red really stings.
loh 5y ago
I remember this happening to me when I was a broke college student over a decade ago. I had to pay some bills and buy some things, and I expected a single overdraft fee, as I knew my exact account balance and the order of the purchases. I remember being hit with 3 (maybe 4) overdraft fees and immediately called my bank for an explanation. They gave me some bs like, "We reorder transactions to make sure your large ones go through first since they're probably more important." It was obvious at the time what they were really doing and why, which led me to eventually close my account with them and go with a local credit union.
Ozzie_osman 5y ago
Yea. For people who aren't familiar with this, the bank will reorder your transactions and batch them to do the biggest one first. Then you get charged an overdraft fee per transaction after that. If they did the small ones first, you may not go into overdraft until the last big one... So you'd pay one fee. Do the largest first, then each small one causes a fee. Highway robbery.
- deleted 5y ago
  [deleted]
- deleted 5y ago
  [deleted]
- chasebank 5y ago
  In 2004 I was traveling around Europe as a 20 year old. Spent my debit account down to my last $20. I had a flight from Barcelona back to Boise and the airline had supposedly issued a paper ticket, not an e-ticket. Long story short, if I couldn’t produce the paper ticket, my flight was going to leave without me. I didn’t have a credit card and I knew I was out of money but I said what the hell, try my debit card to purchase a new flight. Lo and behold, it went through! I came home and a week later my account was -$5,500. Wells Fargo had taken the last charge, the $900 flight, reordered it and I accumulated $4,600 in overdraft fees. I’ve never been so angry in my life. They did not fix the charges, and I got bailed out by my mom. I plead my case over and over but everyone, including my mom, just drew it up as an non-responsible college kid. Every time I tell this story it makes my blood boil.
  - jakub_g 5y ago
    How in the hell they calculated so much overdraft fees? They charge 500% overdraft?
    - ikr678 5y ago
      Poster probably had a series of small transactions from travelling ($5,12$,$13 etc). The bank moved the $900 to the front of the payment queue, and then every one of the smaller transactions cops the fee. It wasn't 500% of 900, it was the sum of the overdrafts on all the previous transactions.
NoblePublius 5y ago
It wasn’t voluntary. Wells Fargo lost a mega million dollar lawsuit for reordering transactions.

EdwardDiego 5y ago

Sounds like one of those "Look! We came up with a voluntary code of conduct, so your regulatory body can stop investigating necessary regulations, we've changed honest, so please feel free to have a triumphant press conference and congratulate yourselves without actually holding us to account."

numair 5y ago

Thanks for reminding me about reordering. There were (are?) just so many dirty tricks. It’s been a couple years since I’ve lived in the US, so I am not aware of what things look like now — hopefully others can comment.

rjzzleep 5y ago

What's transaction reordering? 1. have $10 in your checking 2. pay $9 for steak 3. fill account with $500 4. buy sausage for $2 bank reorders it as 1. have $10 in your checking 2. pay $9 for steak 3. buy sausage for $2 4. charge overdraft 5. count $500 deposit Is that what banks would do? I faintly remember that really old accounts I had in Germany had overdraft capability, but for all newer(last decade or so) accounts, I had to explicitly request overdraft. I guess it was inherently more user hostile in the US. Although in German its not because of good service, but rather because banks don't trust the consumer.

steveklabnik 5y ago
I left a comment about how this happened to me... 8 years ago, wow https://news.ycombinator.com/item?id=6424493 https://news.ycombinator.com/item?id=6424493
AdamJacobMuller 5y ago
The specifics of it are dependent on the bank, but it can be more insidious than even your example. Given a balance of $100 and 4 transactions of $20, $20, $20, $90 you can either be charged one, or three overdraft fees depending on the order in which your bank deducts those from your account. Basically, ordering from largest to smallest will cause the most number of overdraft fees.
- NikolaNovak 5y ago
  I'm going to re learn the lyrics to Oh Canada and sing them joyously and thankfully... Our banking system gets a lot of ire but dear Gawd.
  - joecool1029 5y ago
    I seem to recall there being service levels at banks in Canada and maximum numbers of transactions per month until one gets hit with per-transaction fees. I was told explicitly when I opened my TD Canada Trust account there that it was imperative that I both keep money in the accounts and use them occasionally or dormancy fees would accrue (and if there was no money left, they'd then slam it with overdraft fees). The benefit of US banking despite lax regulation was that there's a ton of different banks and credit unions to choose from. Some are great and some are shit. Literally hundreds to pick from. Canada there was like 5 big banks, a large credit union, and then depending on your area there was maybe perhaps a small community credit union.
    - dsomers 5y ago
      Totally agree, the Canadian banking system is a corrupt cartel the levies it’s own tax on every Canadian. This was made even more clear to me when I moved to the Netherlands and every banking fee was suddenly 1/3 as much as in Canada for the exact same service.
      - doikor 5y ago
        Here in Finland banking fees are a thing only for the poor (and even then we are talking about a total of 20 or 30 euros per year) Basically every bank has some kind of "premium customer" program that you qualify for by having enough investments or loans from that bank and magically all your banking fees go away (obviously they just make their money from the services they provide for your investments/loans)
ryandrake 5y ago
Yes, that's exactly what they would do. Even better (for the bank's profits) is if you had lots of other smaller transactions that day too. They would re-order everything from largest-to-smallest, so it's: 1. have $10 in your checking 2. pay $9 for steak 3. buy sausage for $5 4. charge overdraft 5. buy milk for $3 6. charge another overdraft 7. pay $2 for parking 8. charge another overdraft 9. buy a pack of gum for $1 10. charge another overdraft 11. count $500 deposit It was truly despicable behavior that benefited nobody but the banks.
- beebeepka 5y ago
  Dear gawd. I've never heard of this shit before and hope it's not a thing anywhere else. Amazing it's all legal. That's the very definition of fraud
  - rootusrootus 5y ago
    I may be wrong, but I think this is now illegal in the US. I haven't heard of it in a while, at least. But it's also been some time since I left little enough in my account that it could happen to me, or banked at a shitty bank that would even do it to begin with.
    - plorkyeran 5y ago
      Banks "voluntarily" stopped doing it once regulators got serious about forbidding it and then the regulations never actually happened, so while it's not currently a thing anyone does it probably will be again some time in the future.
- dntrkv 5y ago
  I know Chase and USBank always credited deposits first (going back to about 2006).
- ikr678 5y ago
  What is the time period for reconcilling transactions? Is it reordering them per a 24 hour period? Or is every bank settling them differently.
deleted 5y ago
[deleted]
klipt 5y ago
Yes they reordered transactions to maximize their money. E.g. you have $495 in the account, and you spend: -$5: $490 left -$5: $485 left -$5: $480 left -$500: -$20 left, overdraft fee of $40, $-60 left. They will reorder it as: -$500: -$5 left, overdraft fee of $40, $-45 left. -$5: -$50 left, overdraft fee of $40, $-90 left. -$5: -$95 left, overdraft fee of $40, $-135 left. -$5: -$140 left, overdraft fee of $40, $-180 left.
- Avshalom 5y ago
  And of course even if you deposited a check that day it wouldn't clear until the next business day so you'd pay a negative account balance fee for three days before your money hit.
- Aerroon 5y ago
  Wow. Yeah, the bank employees involved in this should go straight to jail.
Larrikin 5y ago
I think it was more like 1. have $100 in your checking 2. pay $10 for steak 3. buy sausage for $5 4. Buy a ticket for $99 You think you get one over draft fee bank reorders it as 1. have $100 in your checking 2. Buy ticket for $99 3. buy sausage for $5 4. Pay 10 for steak Get 2 over draft fees. Add more transactions in between the ticket purchase to increase the fees.
zaphirplane 5y ago
This thread assumes intentional reordering not that the transaction arrive at the bank out of order I have transactions that show up out of order to the event time. Thou I wouldn’t put it past some smaller banks in low regulation geographies
- desmosxxx 5y ago
  I think it's pretty well documented that intentional reordering happens and still happens
  - mdp2021 5y ago
    Should not that cause legal action - duly and factually?
    - organsnyder 5y ago
      Only if it's illegal.
      - mdp2021 5y ago
        It's a scheme with the purpose of theft. You cannot have law as a list of specific cases: it must be based on patterns - "All arbitrary appropriation is forbidden and sanctioned", then further made into distinct categories to substantiate and differentiate the amount of gravity. All theft is illegitimate.
- Arrath 5y ago
  When the transactions 'arrive' in the bank's system should be immaterial, as they should be timestamped at the moment the card is swiped, matching the date and time the printed receipt I am handed has. Regardless, the bank's mission is to make money, and they can make a lot more of it by adversely reordering transactions in their favor, it is not at all a reach to assume that they do so, and in fact have done so and may well continue to.
brazzy 5y ago
Germany here as well. I have never heard of event-based overdraft fees, only interest-based. Which makes this transaction reordering pointless
- jmkerr 5y ago
  Because it's not true, check the largest consumer banks: https://www.postbank.de/dam/postbank/pdf/privatkunden/Postbank-Preisaushang-678-147-007-0621.pdf https://www.postbank.de/dam/postbank/pdf/privatkunden/Postba... https://www.deutsche-bank.de/dam/deutschebank/de/shared/pdf/ser-konditionen_preise-preisaushang.pdf https://www.deutsche-bank.de/dam/deutschebank/de/shared/pdf/... https://www.commerzbank.de/portal/media/efw-dokumente/preisaushang.pdf https://www.commerzbank.de/portal/media/efw-dokumente/preisa... https://www.hypovereinsbank.de/content/dam/hypovereinsbank/shared/pdf/Footer/Preisaushang.pdf https://www.hypovereinsbank.de/content/dam/hypovereinsbank/s... https://www.ing.de/girokonto/konditionen/ https://www.ing.de/girokonto/konditionen/ https://www.diebank.de/content/dam/f0032-0/PDF_neu/preisaushang-und-geschaeftsbedingungen/preisaushang/Preisaushang_11.08.2021.pdf https://www.diebank.de/content/dam/f0032-0/PDF_neu/preisaush... (Volksbank) https://www.ksklb.de/content/dam/myif/ksk-ludwigsburg/work/dokumente/pdf/preise-leistungen/preisaushang.pdf https://www.ksklb.de/content/dam/myif/ksk-ludwigsburg/work/d... (LBBW) In this sample, if overdraft is enabled, you pay up to 15% p.a., if disabled the cancellation fee is up to 2€ for the postal notice, but mostly just porto (0,80€).
  - deleted 5y ago
    [deleted]
namibj 5y ago
My German back account has overdraft, but that only charges via ~12% annual interest (billed at end-of-month, but charges proportionality if you've been in the red for part of the month). Also note that for ATMs (including deposits) and within-bank transfers, we had no more than a couple seconds latency since €, which got expanded for all willing banks to cross-bank push transactions specifically requested to be "SEPA instant push". The "SEPA instant push" transactions have some issues with reversing in case of accidentally fat-fingering IBAN (target account; like a crypto wallet address but no crypto) or amount. Once the money is in the target account, you basically have to go to court if it wasn't outright fraud. And being instant removes the window you had to call your bank and cancel the transfer. IIRC there are some further liability shifts. And yes, this transparent interest-based handling is why we get by perfectly fine without credit cards.
- t0mas88 5y ago
  Exactly the same in the Netherlands. Didn't even know the Americans got screwed so badly.

eyelidlessness 5y ago

My last bank (US Bank, don’t bank with them) did this in a way where in one day where I had only one transaction which could overdraft they charged 6 overdrafts even though my net would have been positive. If I wasn’t (at the time) skilled at ~~kicking and screaming~~ advocating for myself I would have been out $180 plus whatever 30 cents they had calculated I went negative. Which (again at the time) was the difference between whether I was gonna be homeless.

eyelidlessness 5y ago
Oh since I’m naming names. The bank before that, Wells Fargo, honored a check I wrote > 2 years earlier. Sure, I wrote it and I was good for it at the time. I forgot about it. Maybe I could’ve left that money in limbo but at a certain point I assumed my moderately wealthy aunt wasn’t gonna cash it. Well it doesn’t matter what I assumed, the law said the check was no longer valid. When Wells Fargo honored it and overdrafted me they disregarded the law and said I was committing check fraud if I didn’t pay up. That’s how I ended up at US Bank, because fuck if I’m going to pay you for illegally processing my check. Edit: and yeah I had “check fraud” on my record for years after because Wells Fargo said they didn’t care about the law and just lectured me about being responsible for checks I wrote.
- bagels 5y ago
  You got charged and convicted of a crime?
  - MereInterest 5y ago
    Not the OP, but having it on his record likely refers to his credit record, maintained by private agencies, not a conviction record.
    - rootusrootus 5y ago
      Probably ChexSystems. Kinda like a credit report, governed by the same laws, but distinct from the big three bureaus everyone is familiar with. All the banks use them. And anything negative on that report will prevent you from opening up an account somewhere else until you get it removed.

steveBK123 5y ago

The transaction re-ordering to maximize the amount of overdraft events should have put execs in prison. Out of all the obviously corrupt, mal-intent, direct consumer harming practices this was quite near the top.

Foobar8568 5y ago
In a French bank, I have credit transactions first then debit ones, in a Swiss bank, the contrary, I was shocked, especially that day, I did check my bank account to verify if I could proceed with a wire transfer, the following day, it shown a temporary minus amount but I didn't get an overdraft. So yes, fuck banks.
- laurent92 5y ago
  In Australia in 2010 I got a debit card for the first time in my life. The card would simply reject transactions. “As should be”, I thought. It was a revolution for me.
  - devoutsalsa 5y ago
    Revolut, Simple, and Chime, the three online only banks I have tried, all do (or did) this. It really helped back when I was living paycheck to paycheck.
    - sueders101 5y ago
      For what it's worth; I banked with Simple for the better part of 10 years, but then they acquired by BBVA who was then acquired by PNC. That meant that all Simple customers had to go through account migration twice this year, and in the end now have all the typical fees associated with traditional accounts. Ultimately I decided to move to a local credit union.
      - watersb 5y ago
        Yeah it's been a ride. I moved to One Financial, but I've kept a local credit union account as well. This probably makes no sense, but then again it's ok to feel conservative about banking. It's worked out for me so far. The local credit union is one block away. I have not used it but there are no fees to just park money in a checking account. I still don't know what happpens to such retail banking as interest rates go negative.

iskander 5y ago

I remember getting hit by reordering when I was in college, getting by on a coffee shop job. The bank ordered a group of concurrently unresolved deposit/withdrawals to maximize the overdraft fees (I think I got hit with ~3x $35). It seems silly now but when you're making $5.25/hr, going more than $100 in the red really stings.

loh 5y ago

I remember this happening to me when I was a broke college student over a decade ago. I had to pay some bills and buy some things, and I expected a single overdraft fee, as I knew my exact account balance and the order of the purchases. I remember being hit with 3 (maybe 4) overdraft fees and immediately called my bank for an explanation. They gave me some bs like, "We reorder transactions to make sure your large ones go through first since they're probably more important." It was obvious at the time what they were really doing and why, which led me to eventually close my account with them and go with a local credit union.

Ozzie_osman 5y ago

Yea. For people who aren't familiar with this, the bank will reorder your transactions and batch them to do the biggest one first. Then you get charged an overdraft fee per transaction after that. If they did the small ones first, you may not go into overdraft until the last big one... So you'd pay one fee. Do the largest first, then each small one causes a fee. Highway robbery.

deleted 5y ago
[deleted]
deleted 5y ago
[deleted]
chasebank 5y ago
In 2004 I was traveling around Europe as a 20 year old. Spent my debit account down to my last $20. I had a flight from Barcelona back to Boise and the airline had supposedly issued a paper ticket, not an e-ticket. Long story short, if I couldn’t produce the paper ticket, my flight was going to leave without me. I didn’t have a credit card and I knew I was out of money but I said what the hell, try my debit card to purchase a new flight. Lo and behold, it went through! I came home and a week later my account was -$5,500. Wells Fargo had taken the last charge, the $900 flight, reordered it and I accumulated $4,600 in overdraft fees. I’ve never been so angry in my life. They did not fix the charges, and I got bailed out by my mom. I plead my case over and over but everyone, including my mom, just drew it up as an non-responsible college kid. Every time I tell this story it makes my blood boil.
- jakub_g 5y ago
  How in the hell they calculated so much overdraft fees? They charge 500% overdraft?
  - ikr678 5y ago
    Poster probably had a series of small transactions from travelling ($5,12$,$13 etc). The bank moved the $900 to the front of the payment queue, and then every one of the smaller transactions cops the fee. It wasn't 500% of 900, it was the sum of the overdrafts on all the previous transactions.

NoblePublius 5y ago

It wasn’t voluntary. Wells Fargo lost a mega million dollar lawsuit for reordering transactions.