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Consumers Tell the CFPB About their Experiences (Bad) with Overdraft

Adam Rust's picture

Posted July 1, 2015

Now that the Consumer Financial Protection Bureau has started to publish consumer complaints in narrative form, we can get a much better picture of how some banks harm people through the provision of overdraft. The stories evidence how overdraft can put consumers into a cycle of debt that wreaks havoc upon their personal finances. These stories are copied verbatim as published by the CFPB. In some instances, the CFPB has redacted portions of their commentary. Those redactions have been noted with the use of four X's. 

A) Overdraft fees put a consumer into a cycle of debt. She cannot escape and shortly thereafter, she can no longer provide food for her children:

I bank with PNC Bank. I have for 10 years. Recently .... They continue to take money from my account. I have had {$930.00} taken in past 2 weeks. I have had XXXX {$36.00} fees ( {$140.00} ) totalling {$540.00} just on the same XXXX checks. These fees include a {$36.00} overdraft fee and {$36.00} return check fee on XXXX separate occasions. They attempted to put the check back through when there was no money to cover them. I have an automatic deposit each week. I looked and the deposit went the through last night for this week and the next day my card was declined. They fabricated XXXX overdraft fees ( {$140.00} ) which made my account negative {$88.00}. The account would not be negative if not for these fees. I can not pay my utilities. I have XXXX XXXX children and can not afford food electric or water. I have had a negative balance for 2 weeks and they have charged several {$21.00} fees for maintianing a negative balance and an additional numerous if not daily {$7.00} fee for the same reason. I have paperwork to show these fees. I need help. I ca n't close account with outstanding checks and ca n't make deposits without them taking it all for themselves. PLEASE HELP ME. I need this money back to care for my XXXX children. 

B) Overdraft service is not a service at all:

Wells Fargo committed fraud by stealing money from the elderly. I am XXXX years old, I have a account with Wells Fargo, Acct # XXXX. On Sunday, XXXX XXXX, 2015, the day before XXXX, I purchased food at XXXX XXXX and wrote a check # XXXX in the amount of XXXX}. I also wrote a check on Tuesday, XXXX XXXX, 2015, the day after XXXX, on XXXX XXXX, 2015 I receive a survivors benefit check in the amount of {$XXXX} which post Eastern Standard TIme at XXXX XXXX, XXXX Pacific time. Wells Fargo. On the back of Check # XXXX in the amount of {$75.00} The XXXX stamped it XXXX XXXX, 2015 as being processed, the money was in my account, Wells Fargo fraudulently charged me a service charge of {$35.00}. They also charged me {$35.00} service charge for Check # XXXX in the amount of XXXX. These XXXX checks were covered because my direct deposit from Social Security was in the account. I went to Wells Fargo and spoke to the Manager of the Store, XXXX XXXX, ID XXXX, she took the bank statement along with the XXXX checks and proceeded into her office not asking me to come into her office while she looked at the copies. XXXX minutes later she comes out into the lobby where I waited and broke the privacy act discussing my account with a lobby full of customers. She treated me with no respect and I feel discriminated against me because she saw I was elderly, she failed to ask for my identification. She failed to see on the back of the check the date was stamped XXXX XXXX, 2015 for check number XXXX by The XXXX. It is my opinion Wells Fargo should investigate this store manager, the proof is on the back of the check and she had no right to discriminate me and embarrass me in front of a lobby full of people. I am asking that Wells Fargo refund my money and a apology letter on behalf of their Store Manager, XXXX XXXX she should not work at a bank who judges people by the way they look.

C) A payday lender illegally throttles an account b) the bank's fraud software fails to notice the situation c) the consumer asks the bank to freeze the account d) but the bank ignores that request d) the bank reports the consumer to ChexSystems e) and as a result, the consumer cannot get credit: 

My Citizens bank account in 2011 was hit by a payday loan firm multiple times a day causing me to achieve overdraft fees of over XXXX dollars. I asked the bank to freeze my account so this would not happen and they told me they could not because I was at a negative balance. I had to get a law firm to send a letter XXXX the put my account on a freeze. By then it was XXXX dollars in the hole and not a single penny was a result of an overage. Every single cent was b/c of nsf charges so this cost the bank XXXX dollars but is still on my chexsystems report. Its killing me on getting a car loan. 

D) A bank uses high-to-low check clearing in order to maximize penalties to the consumer:

Citizens Bank, and banks in general, when there are overdraft situations, charge from the highest check down. I.E. XXXX went through, and I did n't know it. It was {$30.00}, and I had another item. They took the larger item first which overdrew me {$1.00} and then the lowest item. If they had taken the lowest item first, it would have been only XXXX fee. THIS IS JUST A WAY for them to make money. When you talk to them about it, they say  Do n't you want the highest paid first. '' Well, it really does n't matter because they pay it anyway and just charge you. VERY poor practices, and I can't believe it 's allowed! Thanks. 

E) Through some procedural error, the bank bypasses a consumer's desire to not sign up for overdraft b) the bank refunds the account when the account holder verifies the mistake c) but the bank continues to run new transactions through anyway d) this , generates more overdrafts e) the bank reports the account as delinquent to a collections agency and to Chex Systems:

I had an account with BB&T Bank. When I opened my checking account I specifically stated I did not want them to process any transactions that would send my account into an overdraft status. I clicked on the  opt-out '' link. BB&T allowed many transactions to go through on several occasions which resulted in exhorbitant overdraft fees. I paid BB&T for some transactions. I even spoke to a representative who stated she saw where I  opted out '' and she refunded my money for this. However, BB&T continued to allow transactions to go through and now they are trying to collect these funds from me. I have spoken to several representatives in customer service trying to resolve this matter but to no avail. I do not believe I owe BB&T any money because of their negligence. I want them to cease all collections activity and to remove all disparaging information from Chex Systems, Telecheck and any other consumer reporting agency that they have reported this information to. It is not right for them to disparage consumers based on their negligence. 

F) a consumer forgets to cancel a recurring ACH which had been established on an account that was subsequently closed by the account holder b) but the bank continues to debit the account c) and then the bank starts charging overdrafts d) but does not communicate with the account holder e) and instead, the bank reports the account to collections: 

I had an account with fifth third bank that I had not used in over a year. There was a single deduction still being made from the account that I was unaware of. I was notified by an automated phone call that there was a problem with my account which prompted me to call the bank. Upon making this call I learned that there was an over draft ; informing me that the account -- that I thought was inactive -- was actually still being debited. I asked the individual how I could bring the account current ; the option of just paying the debt via a credit card ( which I later found out would have been an option ) was not offered. He offered no solution other than for the company to whom the payment was made to refund the money to the bank. I have never received any mailings regarding the account being delinquent or overdrawn from XXXX bank. I did, however, receive a mailing from XXXX XXXX collections agency to my correct and current address which they stated was obtained from fifth third bank. I am curious as to why the bank did not send me any notification of the accounts status or its pending transfer to a collections agency. I have subsequently paid off this debt in full to the collections agency but am unhappy that a customer of any bank could be sent to collections without proper notification ; particularly after I had reached out to them to correct the problem. It is also interesting that the collections agency actually obtained my address from XXXX bank per their employee ( name and employee number in my possession ). And, to boot, the account could have simply been brought current and closed over the phone avoiding all of the hassles and headaches thus far.