Wednesday, September 09, 2009

$34 here, $34 there -- it starts to add up...

The concept of bank overdraft fees is dated and should really be changed in the era of debit cards. Banks should have the right to charge a reasonable fee for the first overdraft - perhaps not to exceed the value of the transaction - but after one overdraft, the bank should notify the customer via cell phone or email that their account is frozen.

For one person to incur $238 in fees in a day without knowing that he was spending money he didn't have is unacceptable in our wired world. The customer here also needs to get a grip on his own finances - if you're out of cash, $4 coffees at Starbucks might have be dropped from your daily shopping list.

"When Peter Means returned to graduate school after a career as a civil servant, he turned to a debit card to help him spend his money more carefully.

So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward.

He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee. All told, he owed $238 in extra charges for just a day’s worth of activity.

Mr. Means, who is 59 and lives in Colorado, figured employees at his bank, Wells Fargo, would show some mercy since each purchase was less than $12. In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear. But they would not budge."

Cheers!

1 comment:

Anonymous said...

Seems to me if you have gone through four years of college and are now in graduate school, you should know how much money is in your checking account!!