In my previous experiences, I've had plenty of overdraft fees and misunderstandings at the bank, but this was a major exception:
I went into my branch office for National City Bank because I did not understand some of the charges on my account. I understand that the ATM and online banking do not always give the correct order of transactions or the most current information on the account. I brought a copy of my online statement and asked the admin to help me understand some of the charges.
She explained how the online register does not tell the whole story (I knew this already). She then brought up my account on the computer. She showed me how transaction A had caused my "pending charges" (C and D) — there were two other charges waiting to post to my account — to exceed my "available balance" (AB) at that time.
AB1 - C - D = AB2 0
Available Balance minus transactions C and D is still above zero
AB2 - A = AB3 < 0
that's Available Balance (after C and D) minus transaction A drops the balance below zero
Transaction A enacts an OD fee.
This I understand. What I began to struggle with was that the next business day I had a deposit post to my account, bringing my account into the positive again, but then I received two more overdraft charges. I asked why I was charged for these fees and what had caused the charges to take effect. She explained that when the two pending charges posted — after the previous overdraft fee — they dropped my "ledger balance" (LB) below zero.
LB1 - OD1 = LB2 < 0
LB2 - C = LB3 < 0
LB3 - D = LB4 0
Overdraft drops balance below zero, trans C enacts new overdraft, trans D enacts new overdraft.
It took me a minute, but switching between "Available Balance" and "Ledger Balance" gets very confusing. Basically, available balance is how much money is available IF all pending charges post at that moment. It's a theoretical balance. So, the first fee makes sense because the total of all my pending charges would drop my balance below zero if they posted at that moment.
Ledger balance is a tangible thing. It is the official balance that is posted every midnight when all transactions are finalized. So what happened was the overdraft fee from my available balance posted to my account. Then, my previous pending charges posted thereafter. I was then charged two more overdraft fees because my ledger balance was below zero (from the first OD fee).
Yes, I was charged on three separate transactions. The problem arises because I was charged on two ends of my transactions. I'm not sure if this is illegal, but it is most certainly unethical. If my transaction A had never happened, I would have had zero overdraft fees. If I was only charged when my charges posted to my account (ledger balance), then I would have had one overdraft fee for transaction A and none for C and D. Because of the bank overdraft fee on my pending transactions, when my pending transactions became official and posted, I was charged two more overdraft fees.
I continually, as calmly as I could, tried to explain my concern to the bank administrator that I was dealing with, but she kept explaining that my available balance was below zero and then my ledger balance was below zero so that this was not a bank error and that they did not charge me twice for the same transaction and they did not charge me a fee for having insufficient funds for their fee.
Then, she asked me "Do you know what a register is in your check book? Do you need someone to explain to you how to use it?" I replied that, yes, in fact I do know what a register is, but I prefer to use Quicken for real time banking and enter my transaction on my Palm the moment I make them. I then ask her, "please do not treat me like I am stupid." She yelled back, "sir, you need to lower your voice and get yourself under control." Honestly, my tone was excited and somewhat annoyed, but was not raised. Assertive, yes, aggressive, no.
I continually asked her to please listen to my concerns. I asked for a manager and she replied that he was unavailable. I asked to close my account, she said I wasn't allowed. I tried to explain my concerns again and she just said I was wrong without even hearing me. I grabbed my papers, crumpled them up and marched out, fuming.in the process, I heard a siren going off while I was walking out. It dawned on me that she had pulled the alarm. Seriously? This is customer service?
I'm interested to see the rebuttals to this. How can anyone not understand that this is unethical banking?
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