I pay the family bills on time and have good credit. Once in a while, though, I'm overwhelmed by the demands of work and family.
The checking account balance, understandably, falls off my radar screen. Like last week when I overdrew our checking account.
My bad. I admit it.
But it's unconscionable for a bank to hit me with a $35 overdraft fee for an $11 Dunkin' Donuts debit, and hit me with it again and again until the fees totaled $170.
What I'd really like to see is legislation that protects law-abiding consumers from these obnoxious fees. PNC bank generally charges between $31 and $36 per item. Wachovia customers may get a break for the first infraction -- $22 -- but the bank generally charges $35 for additional items.
I understand that banks rely on fees to encourage people from intentionally writing bad checks or being habitually overdrawn. But I'm a law-abiding customer who simply makes an honest mistake every few years.
That's what happened this month. I wrote some big checks for monthly bills and home improvements. I forgot about one I had written earlier -- a mistake that's easy to make when lots of cash is leaving the account.
My husband used the debit card at around the same time for some minor purchases at Dunkin' Donuts and Walgreens. I somehow exhausted my overdraft protection credit line we opened for rare events such as this one -- and unknowingly initiated a chain reaction of $35 fees, totaling $170 dollars over two days.
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Keeping track of a checking account during the electronic age would seem to be an easier task than when paper registers were in vogue. Back then, one family member usually managed the account, and only paper checks went in and out.
Multiple players have a hand in my checking account today -- and probably yours. I've authorized numerous automatic bill payments, debits for our life insurance premiums, direct deposit and electronic transfers to our IRAs and children's college education accounts.
My husband and I also use debit cards -- and who has time to call each other at work to review the costs of lunch or shopping at Wal-Mart? I suppose I could learn Intuit's Quicken, but that would mean spending even more time in front of the computer than I already do.
The "Check 21" Act, enacted in 2004, bestowed cost-savings benefits to banks, such as electronic check processing, which reduces processing time and permits the return of scanned copies of canceled checks to consumers, instead of the originals.
So why not share the savings with consumers, by requiring banks to email them immediately when an account is overdrawn?
I was unaware of our overdraft until logging on to our Bank of America account online, where I saw red numbers, instead of black, in the balance column. The bank didn't notify me of the problem until several days later, when a letter arrived via snail mail. A customer service representative told me that federal law requires snail mail notification, but that I was responsible for setting up email alerts.
I learned of an "alert" system, available via Bank of America online banking, that sends unsecured email to customers, with information such as daily balances, low balances and overdraft notification -- but only if the customer activates the system.
Why should the customer bear the responsibility of arranging electronic notification? Many financial institutions clearly don't have a problem sending promotional messages via email.
Why not require banks to immediately notify consumers of an overdraft via email -- even one that alerts customers to log in for a secured, important message about their balance? I could have incurred $35 fees repeatedly, for days, until the snail mail notice arrived.
Another consumer law that would have saved me considerable agita this month would require banks to block debit-card transactions -- with no fees attached -- in the event a customer's account is overdrawn. Or, at the very least, the law could require a message to appear on the debit PIN pad, alerting the customer that a $35 fee would apply to complete the transaction.
A customer service representative told me that the bank honors debit card transactions as a "courtesy" when a customer overdraws an account. "How is charging me $35 for an $11 transaction a 'courtesy?'" I asked. I suppose that's a tough question to answer if you represent the bank.
The good news is that the bank reversed three fees -- $105 -- after a bitter conversation with a customer service representative, and then a supervisor. The fact that I hadn't overdrawn my account for many years helped my case.
The supervisor, however, defended the bank's fees as consistent with industry standards. He also said that some other banks even assess a daily overdraft penalty on top of the per-item fee.
I'm not expecting consumer-friendly banking legislation to pass anytime soon. So, in the meantime, I've activated the online banking "alert" system to notify me of my daily balance.