US Bank
Ripoff

I have been hit with excessive overdraft fees from this bank and encountered the same problems as others complaining of this situation. The Bank will process transactions out of order to create several overdrafts and charges instead of one charge for the item which overdrew the account.

In doing some research I found this is common practice among the banks now. Fortunately the courts saw this as a bad practice and Bank of America lost a class action lawsuit over the same issue. I would like to suggest a class action lawsuit against US Bank. Below is an article about the suit against B of A.

Excessive overdraft fees
In 1999, a class action lawsuit was filed against Bank of America for engaging in the practice of "Biggest Check First" check clearing. Put simply, the bank clears checks in order from biggest to smallest, with less regard to when they come in. Customers allege that this is purposely done, to cause more checks to bounce, triggering more overdraft fees for the bank to collect.

Here's an example: A customer has $1,000 in his checking account. Check numbers 101 through 104 come in for processing for $60, $10, $30 and $950, in that order. If the checks are processed by the check number or in ascending order (smallest to largest), the first three checks will clear and the fourth will bounce, meaning the customer will be charged one fee for insufficient funds. NationsBank (now Bank of America) charged $29 for each bounced check. If the checks are processed largest to smallest, however, the $950 check will clear first, and the checks for $60, $30 and $10 will bounce, resulting in $87 in fees.

The bank employs the same practice for ATM and debit card transactions. Another example: A customer has $100 in her account. On Saturday she withdraws $80 from an ATM. On Sunday she buys a coffee using her debit card for $3 and fills up her gas tank for $15. As of Sunday night, she still has $2 remaining in her account. On Monday, her recurring monthly cable bill is auto-debited from her account, for $150. The bank clears this transaction even though the customer is now in the negative. This is standard grounds for an overdraft fee, so the customer expects to find one on her next statement.

However, when the customer checks her statement, she finds FOUR overdraft charges. One for the cable bill, plus one for each of the debits over the weekend. The customer is naturally confused, as she had not overdrawn her account for any of the weekend transactions. Yet, the bank counts those charges as overdrafts by claiming that they do not post until the next business day, even though the transactions were all computerized and date-stamped over the weekend. Since the bank then employs "biggest check first", the smaller weekend transactions clear after the cable bill that came in later. The customer get four overdraft charges total, instead of one.

BOA paid a $9M settlement to end the lawsuit in 1999, but they continue to process transactions from highest to lowest amounts. New York, California, and Nevada are currently fighting the practice.

When asked about the practice, bank representatives claim that it insulates the Bank from undue risk.By paying the largest items first, the Bank ensures that no loss is incurred on the largest items, by withdrawing the appropriate funds from the customer's account and honoring the largest, and most risky items. Smaller items, which may or may not be honored against a negative balance, depending on the account officer's decision, pose less liability to the Bank, and are therefore paid last. Also, regardless of when checks are written, their negotiation can happen in a number of ways, including direct presentment at the drawee bank, at which time funds are immediately reserved out of the customer's account to pay cash to the payee who cashes the item. Such policies are designed to reduce the risk of loss to the bank.

Bank of America customers also claim that the bank's ATM and Online Banking systems are purposely designed to make the customer believe their balance is higher than it actually is. Again, customers claim that this increases the likelihood of incurring overdraft fees. Customers claim that when using their Bank of America debit card for purchases or ATM withdrawals, the amount of the charge is immediately deducted, then replaced several days later, then removed once again. If charges were made during the period when the money was temporarily back in the account, those charges go through - and incur an overdraft fee. BOA's response is that their Online Banking and ATM systems should be used in conjunction with a written account register so that customers are aware of all pending transactions on their accounts.

Finally, in February Bank of America changed their online bill pay policy to become the first major bank to send customers' automated bill payments without debiting the payments from their account until the day after they are processed by the payees' bank. Unlike most online banking systems, which remove the check amounts from customer accounts the day the bills are sent, Bank of America claims this allows money to remain in their customers' accounts longer. Opponents of the change claim this is yet another example of Bank of America overtly trying to drive excessive overdraft fees.

Company: US Bank
Country: USA
State: Minnesota
City: Minneapolis
Address: 800 Nicollet Mall
Phone: 6128722657

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