Bank overdraft fees lead to lawsuit

Do you get hit with high overdraft fees from your bank? Sick of it?

In most instances, I'd say that should make you pay more attention to how much you're spending. But what if your bank was charging you with fees even if you had enough money to cover your expenses? That's what one woman who is suing her bank, Fifth Third Bank in Cincinnati, is claiming. (Fifth Third sued over overdraft policies).

Since the suit was just filed, it'll be a while before we know how the court comes down on this, but I suspect many people feel vindicated just because of the lawsuit itself? How many times have you felt screwed by a bank with no recourse? I know I certainly have.

A few years ago I got a fat check for some freelance work and deposited into my checking account at an ATM machine. This was normal and I'd never had a problem doing so. A few days later, I wrote checks to cover some bills, and I'll be damned, they all bounced. Why? Because the bank never credited my account with the amount I deposited. A bank representative told me on the phone that that was because they didn't recognize my signature on the back of the check (as if someone working there KNEW exactly what my signature looked like, and never mind the fact that the name and address on the check matched the name and address on my bank account).

It took a few days and I finally got the issue resolved, but for about a week, my bills were unpaid, I had no access to my own cash and I'd been hit with more than $100 in overdraft fees. All of this happened after I deposited a check into my own account for more than double the amount of bills Id written checks to pay.

Needless to say, I switched banks. So I'm curious: what are some of your bank fee horror stories? Unfair overdrafts? Onerous ATM fees? What does your bank do that you hate?

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Need cash? Just borrow from an ATM

Sometimes you see things you just don't believe, and on those days, thank god for camera phones. The image above is what I saw when I went to withdraw money from a US Bank ATM machine at Cleveland Hopkins International Airport last week.

Look real close at the top option on the left hand side and the bottom two on the right. Can't see them well enough? Try this one:


You're not seeing double: when I told the machine I wanted to make a withdrawal, it asked me if I wanted money from my checking or savings. OK. Or, um, did I want an advance from a credit card? OOOOK. Or, maybe an advance from a credit line? Ummm, no, not that one either.

Alright, then. How about an advance against your next deposit?

WTF??

I'm not sure how many banks besides US Bank are doing this at their ATMs, or how new this is. I do know I've never seen those options before. But it strikes me as exactly the kind of things consumers should be avoiding and banks should be wary of. Taking an advance against your next deposit from an ATM machine sounds like a close cousin of getting a payday loan. It's certainly a form of borrowing money, and without any vetting or loan application. Just punch in your PIN and go.

I wonder what the terms are: how much interest do you pay on that advance? How long do you have to make a deposit afterward to cover for the advance you took? How much interest are you paying on top of any ATM fees? If US Bank isn't your bank (it isn't mine), do you pay interest or fees to both institutions?

And what happens if you don't pay the money back?

'My Bank is the Devil'

A reader in Boston emailed me about a disappearing deposit that has her equating her bank with Beelzebub:

What rights do I have if someone stole my ATM deposit from XXXXatm receipt (thank God), but now i have to go to the bank in the morning to investigate what happened and to see if they can check their surveillance cameras. They said I'm basically at the discretion of the bank manager. WHAT??? They have to give me back the money, right? The person who takes out the ATM deposits had to have stolen it. It's an inside job. WTF???? OMG! Bank? I deposited $1200 last week and noticed today that my account was debited for the same amount. I never go into the branch unless i absolutely have to, so I deposited the cash into my account via the ATM. I haven't made any large purchases, or shopped at all for that matter, so I called customer service to see what the charge was for. They don't have the $$$$. I have my

I can understand why you're pissed -- this has happened to me before -- but it doesn't make your bank evil. There are plenty of other things that probably make them evil, but not this, per se. Your problem should be relatively easy to solve since you have the receipt proving that you did, indeed, deposit the money at your ATM machine. As far as your being at the discretion of the bank manager, my guess is that in the case of a potential fraud at a federally-insured depository institution, there are several higher powers to which you can appeal.

All that said, I don't think your money was stolen. "Disappearing" deposits from ATM machines aren't all that uncommon. Banks have to be sure that the person making a deposit into an account has the authority to do so, and anything, like a weird-looking signature a check to a deposit of a large amount of cash can be cause of a red flag that will delay the clearance of money into your account.

A few years back, I deposited a check for some freelance work into an account I had with Bank of America. A few days later that money had disappeared from my account. After a few calls I found out that a branch manager had flagged the deposit because he or she couldn't make out my signature. I was incredulous: there's no way the bank manager would have known what my signature looked like anyway, and the check I deposited was made out to the same name and address as the one listed on my account. Ultimately, I got the money back but not without some frustration.

Since then, my rule has been to use ATMs only for withdrawals. Making a deposit in person makes it quite impossible for anyone to dispute the amount deposited or that it was indeed you who put the money in. It usually means a deposit will clear faster, by at least a business day or two, than one you make at an ATM.

Good luck getting your money back.