The Degradation of the Banking Industry

There was a time, way back when, where credit cards were for the rich and powerful. Eventually the banking system had enough infrastructure and inter connection with the rest of the financial machine. They decided to make debit cards available. They started handing out check cards like candy and making prepaid debit cards available off the shelf at the dollar store. This in and of itself is not a bad thing. Credit cards and bank cards that operate like credit cards are very handy and almost obligitory to have these days. Even McDonalds who for whatever reason was not able to accept credit cards for decades, finally has the ability.

What does this have to do with the corruption and degredation of our banking system? It makes victims available. You are signing up for more than you guessed when you have a bank account. The more "features" your account has the more ways they have of robbing you blind. How do they get away with it? Even though these rules and policies affect every customer, the more reliable your income the less it is noticable.

Here is a real example of what many banks are doing. A young woman was let out of the service a few years ago. She was given a 60% disability for injuries she sustained during her service to our country. She receives a small disability payment every month to pay her bills because she can no longer work. Her check is direct deposited into her checking account every month. Her budget is extremely tight leaving less than $100 at the end of the month. She has a very tough time keeping her book balanced too, having some mental impairment along with her physical problems. If a mistake is made she gets the dreaded overdraft notice. Overdraft fees at many banks are in excess of thirty dollars for the initial offense and seven or more dollars a day if the money is not put in immediatly to cover the overdraft fee and the amount of the overdraft.

So far this is not a big deal, people screw up and the bank gets to charge you a fee when you do, right? Sure, that's business. Heres where things get nasty. This is what banks have started doing. Banks reorder your transactions. They don't care what purchases where made. They don't care where or when. They will tell you it is a "Service" to have your transactions reordered. The nitty gritty of it is, they pay the largest transactions first. People like my friend who make alot of one to five dollar purchases can get in alot of trouble and the banks don't care.

Her father is a banker by the way. He told her, just talk to them, they will work with you. Problem is that doesn't help when you make that mistake more than once or twice. So far many people hearing this will say, get the girl a calculator and quit whining. Right? well how about this? last month her bank reordered her transactions when she made a twelve dollar mistake. I repeat twelve dollars. Once again, twelve measly dollars. Take a wild guess what they charged her. She had over three hundred seventy dollars taken out of her disability check leaving her rent and some of her bills underpaid. Luckily her landlord is a very kind woman and she has a payment arrangement.

If you aren't confused and wondering how a twelve dollar mistake can turn into three hundred and seventy then you either work for a bank or had this happen to you. Heres the break down. They charge you 10 dollars for being overdrawn last month. This fee is usually taken out right after your account reaches 9.99 or less. This fee is considered your fault, since you have to make the mistake to begin with. Fair enough. Then once they overdraft you by a penny they hit you with a thirty five dollar fee for your account being overdrafted by the fee they charged you. then they reorder your transactions so that the forty five dollars or so they just charged you occurs before all of the transactions you made that will fit inside that amount. Then they overdraft you again for every single transaction that they changed the order of that fits inside that amount.

The short of it is she received in excess of ten simultaneous overdraft fees for one overdraft. Had they not changed her transaction order she would have been twelve dollars in the red. This isn't even considering that you cannot get them to decline your card when you no longer have money on it. Heres another little tidbit. Pin transactions aren't safer than credit. Banks will now allow you to take money you don't have from the ATM itself. They have made their networks divergant to prevent realtime updates of online ledgers. I have seen them removing transactions from the ledger for several days then reapplying it. The effect is they are hiding transactions for a few days allowing their careless or uninformed customers to make more mistakes.

She was overdrafted a few dollars because of an ATM transaction. The exact mistake was that the withdrawl was performed without her checking the balance in her pocket ledger first. The banks are falling apart because of bad investments and poor management. The only way they can survive is by screwing as many people as they can get away with. I have a solution to this problem. It's real simple, take away their ability to charge punitive fees that exceed the costs they incur to cover overdrafts. Anyone can charge a returned check fee legally. That's because it costs money to process a check even if there is no money in the account it is drawn from.

What the banks are doing is forcing their poorest customers to accept micro loans at horrific rates. Does two hundred dollars sound fair for a pack of cigarettes and two gallons of gas? That happened to me. This is not just happening to people who suck at math and deserve to pay fees. This is happening to people who have children in chemotherapy dying parents and any other combination of distractions that cause them to miss the mark by a single penny. Once a bank gets away with it a couple times they get bolder.

I payed JP Morgan Chase over two thousand dollars in overdraft fees. They kept hiding transactions on me, charging me strategically placed fees that would overdraft me a few cents then reorder my transactions to cost me as much as they could. I tried talking to them and they would look at my ledger and say well you made a mistake it was your overdraft. What's the key here? Overdraft is singular not plural. They know that people are embarrassed to talk about their mistakes. They know that it's impossible to live a normal life without some form of banking in our society. They have us by the short hairs.

Contact your congressman if you have experienced this type of predatory banking. Demand that they force banks to use standard rates if they are going to force us to take out loans rather than declining a transaction.

They claim you can have your card set to decline rather than allowing it. They may be able too. but everyone I know has either been told it can't be done or they were told it had been done for them but nothing about their card changed. They where still able to overdraft their cards.

Tell your congressman that the banks stupidity and poor management should not be subsidized by the working poor and our nations disabled veterens. It is ridiculous for people to pay hundreds of dollars because the bank changed the order of their transactions. Myself and my friends all have personal ledgers, but even that doesn't always save you when you live paycheck to paycheck. Tell them if the banks are going to force us to accept their micro loans for our overdrafts that they must charge a resonable rate. Tell your congressman to hold the finacial institutions accountable and prevent predatory lending.