Let me start by saying that I am very disappointed that I have to write this report on my own bank. I feel that a bank should be a place where the customer should feel safe and does not have to worry about being taken advantage of or ripped off. Up until recently I have always thought of Old Second bank as a safe place to keep my money as well as a place that I could trust for financial security. I have come to realize that I was living in a fairy tale.
I have been a customer at Old Second since I was a little boy with my first savings account about 25 year ago. I have never needed to bank anywhere else and was always a proud customer of this prominent bank in my area.
In the last few years Old Second implemented a protection program for checking accounts. This sounds great, but is very deceiving. The plan is setup to cover any overdrafts that might occur as the result of not having enough money in the account to cover a check that was written or charged to the account from a debit card.
These charges are set at flat rate of $30 per transaction once the customer reaches a negative balance in his or her account.
So, if the customer is not aware that they are in the red and they continue to use their debit card not only are they going to need to deposit money to bring the account back into good standing, they will also have to pay $30 per transaction while they were in the red. This could end up easily costing the customer hundreds of dollars in just a few transactions that might only total a few dollars.
If a customer buys something and goes into the red by one cent they will have to pay a "convenience fee of $30.
Here is an example:
A Customer has a balance of $50.00 in their checking account. On the way to work they stop and buy gas. The gas costs $55.00 and the customer uses a debit card to pay. Their checking account goes into the red by $5.00. Old Second is then going to charge them a flat rate of $30 for going negative by $5.00. Then at lunch the same customer stops and gets a sandwich for $5.00. Since the account is still in the negative, Old Second will charge the account another $30. Then on the way home from work the same customer stops at the store and picks up a few things for dinner. They use a debit card to pay for the $5.00 in groceries. Old second will again charge the customer $30.
So, today this customer that made an honest mistake and didn't realize that their account was getting low has been charged a total of $90.00 in convince fees while the account is only in the red by $15. Does this sound fair? It sounds like a scam to me.
The bottom line is that Old Second is taking advantage of people. The flat rate fee is not fair to the customer.
I am not saying that there should not be a charge of some kind. This is only fair that the bank receive compensation for temporarily loaning money to its customers, but the current practice is hurting people financially.
A fair way of handling this would be to charge a percentage of the amount of money the bank covered per transaction.
Another problem I have with this policy is that Old Second does not even care if you have another account with them such as a savings account with a positive balance. If you have a checking account that goes into the red and you also have a savings account with a thousand dollars in it, they will still charge the $30 fee per transaction.
Old Second will argue that the fee is set at $30 to cover the costs involved in dealing with overdrafts. I don't buy it.
In todays world where everything has become computerized and automated, I highly doubt that it is costing Old Second $30 every time a customer exceeds their balanced. I would be surprised if a human is even involved in the process. I am sure that it is totally computerized and automated.
Old Second is looking to make a quick buck off its customers. That is what is happening here. It is a perfect example of the old saying "The rich get richer and the poor get poorer".
Not only is Old Second taking advantage of its customers, it is taking advantage of the customers that are going to be hurt the most buy these excessive fees. This practice has a real "Kick you while youre down" feel to it.
I think that Old Second is getting a little too big and powerful for its own good. They have forgotten they started out as a small community bank that cared about the customers. It looks like the nice small community bank has turned into a greedy power hungry monster.
I encourage other people that see the problems with this policy or have been personally hurt financially by it to take a stand. This needs to stop and a message needs to be sent. Old Second as well as any other banks that feel that taking advantage of their customers is a good idea, need to be shown that this is unacceptable.
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