Sep 8, 2009 2:25 pm US/Pacific
Call Kurtis: Overdraft Manipulation?
SACRAMENTO (CBS13) ―
An unemployed Lathrop man says he overdrew his account by just $10. Now the bank wants him to pay $175 in fees.
Out of a job, Jeff Ledford is pinching pennies. He says what his bank is doing is an unfair business practice and manipulation.
Jeff admits he should pay Bank of America's $35 penalty if he withdraws more money than he has in his bank account. But he doesn't agree with how he says Bank of America is manipulating the order of his debit card charges so he gets hit with the most penalties.
Jeff showed us how in one week, Bank of America took his charges out of chronological order, deducting the largest payments first. By the time the bank processed his smaller charges, he was in the red.
The bank slapped him with 5 overdraft charges totaling $175 in penalties for overdrawing his account just $10.02. That's 1750% interest to cover him for overdrawing his account just ten bucks.
"And that to me is predatory practices," Jeff told Kurtis.
We contacted Bank of America. They admit they deduct transactions from a customer's checking account in order of the largest dollar amount to smallest saying "customer's largest transactions are those most important to their lives". They went on to say this is the "industry standard", and customers are sent the policy when they open their check cards.
"I think it's a bunch of crap. I think what's most important is truth and honesty," Jeff told Kurtis.
After we got involved, Jeff got a call from the bank's corporate offices. They reversed the $175 in fees saying because Jeff is unemployed; he qualified for their customer assistance program which will waive fees for three months.
"A snag like this in times like these, hurt. They hurt," Jeff said.
Bank of America gave Jeff a total of $210 for these overdraft charges and a previous one. Bank of America just settled a class action lawsuit and will pay $35-million back to customers part of the suit. --Among the allegations; taking charges out of order, and hitting customers with the most overdraft fees. The bank tells me they settled this to avoid future legal fees, and they admit no wrong doing.
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