Looking for Clients: Have You Been Charged Unwarranted Bank Overdraft Fees?
In October 2009, shortly after TD Banknorth changed its name to TD Bank - "America’s Most Convenient Bank" - there were apparently some major IT glitches that resulted in many customers having difficulties with their direct deposits and viewing real-time account balances. As a result, many customers were charged overdraft fees through no fault of their own. It was at this time, while viewing numerous overdraft fees on their statements, that the public became more aware of a little known banking trick. When there are several current debits to an account, many banks, not just TD Bank, apply the debits in reverse order of their value and not the chronological order that they were posted to the account. Therefore, no matter the order received, the largest current debit is applied to the balance FIRST, then the second largest debit, third largest debit and so forth. This is important because, if for some reason that largest debit makes you go over your balance, you are then charged overdraft fees for every other debit – even if the remainder of the debits would have been covered by your initial balance. (read this customer's complaint.)
For example, on one date this past fall, a TD Bank customer had approximately $2500 in a checking account and had previously scheduled electronic payments in the amounts of $12, $300 and $2700. Additionally, on that day, two checks written for $20 were presented for payment and $200 in cash was withdrawn at an actual bank location. As bank policy is to apply the largest debits first, TD Bank applied the $2700 electronic payment first, thereby overdrafting the account of $2500. This resulted in the first of six $35 overdraft fees totaling $210 - only one of which was actually greater than the balance of $2500 and three of which were actually less than the $35 penalty. However, had TD Bank applied the lesser debits first, the account would only have been overdrawn for one transaction (notwithstanding the questionable banking practice of charging the $35 overdraft fee in the first place - without any consent from the customer to engage in this practice.)
Based on this system of accounting, excessive bank overdraft fee lawsuits have been filed against numerous banks, including Wells Fargo, Bank of America, M&T Bank and Wachovia. The lawsuits allege that these banks have used unethical practices to send bank accounts into overdraft mode. More specifically, the lawsuits allege that the reordering of credits and debits so that customers are forced into unwarranted overdraft fees is outrageous. Further complicating the issues with this practice is that bank customers have never actually requested any type of overdraft protection.
Legislation currently under consideration in Congress would prohibit banks from levying more than one overdraft fee per month or six per year. According to a Bill under consideration in the House, overdraft fees would be subject to the Truth in Lending Act, requiring consumers' permission before enrolling them. Further, it would prohibit rearranging the order in which transactions are posted, which can trigger an overdraft, and it would require fees to be in proportion to the amount overdrawn (i.e. a $5 purchase could not have a $35 fee).
This proposed legislation could save each bank customer hundreds of dollars, and prevent banks from preying on these unsuspecting customers to the tune of millions of dollars each year.
If you have been the victim of these deceptive bank practices, please do not hesitate to contact us.
live in NY but do my business in MA. When I opened my account the bank in North Babylon, NY was a commerce Bank. TD bought them out. I generally make deposits approximately 5 days a week in MA into the account that i opened in NY. I met with an account specialist at the NY branch and was informed that TD Bank and TD North while the same bank, was in the process of merging and that as of Sept. 27th, 2009 their data bases would merge and that they would become one. The reason I acquired is that I was considering changing to Bank of America in order not to have delays in my deposits made in a state other than the one my account was opened in. I was assured that as of the December date I would have no other problems. Well, on 9/27/09 the Braintree, MA branch actually lost a $3,300 cash deposit I made. I was charged for multiple overdrafts. I had to instruct my employees that I didn't have payroll on pay day. The bank issued me a credit since I had the deposit ticked but it took four business days to locate it and by the time it was corrected, employees of mine doubting my bank error excuse quit. This time the bank did refund over $400.00 in OD fees. I realize mistakes can be made so I forgave the bank and continued to do business with them. Two months later the bank did the same thing on a $2,700 cash deposit. Again it hurt me with long time vendors who's checks were returned and even though the bank again found my deposit (4 days later) and refunded my over draft fees. I lost a bit of good will with the vendors in question.
Again I forgave the bank. But what has happened to me over the past 45 to 60 days has been incomprehensible.
When I make a deposit in MA for my NY account I have been informed by tellers from every in MA that cash deposits update immediately and check deposits update $100.00 immediately that is available and for use and that the remainder of the check updates in 24 HRS. So I would make a cash deposit, again I was reassured by the teller that these funds were available immediately. I made a point to ask because my wife in NY needed to withdraw the funds. I even went so far as to check on the ATM machine that it showed the funds available. It did. My wife would withdraw the money, which she could only do if the system showed the teller in NY that they were available. In addition I would make small purchases with my card in MA making sure to stay within my available funds. Well three days later I would receive multiple overdraft fee notices in the mail. Every time I inquirered with the bank they would tell me something else must have cleared my account. They even tried to tell me that a gas purchase or some other charge made weeks ago may have come thru given that certain vendors have a few weeks to submit there charges. I doubted it since I keep an accurate register myself. Basically they tried to infer that it was my sloppy bank keeping that was to blame for these problems. I got to a point where I thought maybe someone had accessed my info and was making fraudulent charges. I am not a banker or CPA but in going over bank statements, nothing made sense. Finally on March 15th, 2010 I got to the bottom of it. Apparently unknown not just to every teller in MA but even the bank mgrs. When I make a Cash deposit in Mass. using their accommodation banking deposit forms, the bank has a crazy system. When you make the deposit you are informed by the teller it is available immediately, the atm's show it is available, but infact it is not. Apparently accommodation forms are dropped in what I am now being told is a drop box where clerks in some central office charge back your deposit as though it was never available, charge od fees for anything it was used for and than recredit your account the next day. This includes the hundred dollar immediate credit on check deposits. It took hours of my time, contact with regional personal wit the help of a bank mgr in Foxboro, MA to get to the bottom of this. In the meantime it has cost me over $2,500 in fees that while the bank keeps promising to get back for me ( and when I say bank I mean certain branch mgr.s who can't believe this has been done to me) but It's gotten to the point where I feel I'm being given the run around. I have saved all my atm receipts showing available balances on days that in fact it wasn't available, I could walk into a branch tomorrow, and I've tested this and I will be misinformed again. This total incompetence, this stealing of my money, the continuous misinformation by the bank has my small business on the brink of failure. I've lost employees, goodwill with vendors, some who will no longer extend me credit and will not accept checks from me. I know this sounds to ludicrous to believe. But I can proof it. If you doubt me go into any MA branch, inform them that your TD branch is in NY and was formerly a commerce bank, and ask them the availability of funds on a cash deposit and you will be misinformed. You will be told the money is available immediately. Your atm card will show availability, but if you access the funds you will be charged $35 dollars per transaction
We opened a "student checking account" at Commerce Bank in Blue Bell Pa(about 7/09)for our son about to enter college. This account was opened soley to give him an Debit card to use in college. The purpose of a debit card, as opposed to a credit card, is that you can only spend what you have...simple, right? In September of 09 the Commerce was bought by TD Bank. To give the abbreviated story, we just figured out that we have paid over $900 in overdraft fees for this card. When I questioned why they continued to approve charges when the money was not available, I was told that all customers were automatically enrolled in the overdraft protection plan as of the take over and that we should have read the "rather large package" that was mailed in Sept. This account was set up only two months prior to the take over, and was simply a vehicle for giving our son access to money and to make debit charges. What could go wrong?
I received my first debit card in college 25 years ago, and have been using them at various banks since. I have never heard of extending, what amounts to credit, to a debit account. The purpose of giving our son a debit card, instead of a credit card, is so that he would not be able to get himself into trouble financially. Over $900 dollars in overdraft fees later, we cannot believe that this has happened.
Should my son have been keeping track...yes. Should we have known after the first $600 in charges...yes. However, the point is that this cannot possibly be considered ethical banking practices.
This just unravelled today, and I am amazed at the amount of information that I found by googling "unethical banking practices TD Bank". Rather than continue to being angry, I would like to take some legal action. I am sure that the $900 is gone, but I would love to see them stop this sneaky practice.
Please let me know if you can help or have advice!
Thank you,
M Pierson