Thursday, October 16, 2008

Credit Card Horror Story

A friend told me a cautionary tale:

He had a credit card on which he carried a significant balance at an introductory rate. That card was bought by Bank of America, the bank he uses for his personal and business banking. When his mail came, he stacked the B of A envelopes and didn't open them immediately, thinking they were only bank statements.

Au contraire. His oversight cost him $200 in late fees. He said that was a one-time fee and not accrued late fees over several statements. (I find that shocking--even for B of A--but it's what he said.) They also jacked up his rate.

He placed a phone call to the bank and they returned his rate back to the introductory one, but the whole experience cost him--by his estimate--several hundred dollars and a lot of stress.

Moral of the story? Open all of your mail promptly, just in case. And work on liberating yourself from credit cards.

I would also advise being aggressive about pursuing a refund in situations like this. This has happened to me a few times in my life--particularly during times of transition when my statements didn't catch up a a move in time, or when i lived with roommates and a statement got misplaced in our group mail experience. In almost all cases, the fee was reduced or removed.

Labels: , , , ,

Monday, April 28, 2008

Beware Bogus Bank Fees

This weekend I received a letter from my bank, TDBanknorth, telling me that I had violated Federal Regulation D and had been charged a $20 fee for each infraction. I logged on to my account to discover that I'd been fined $40.

It turns out that Federal Regulation D limits the number of debit or withdrawal transactions on savings accounts to six per statement cycle. This includes, apparently, transfers of funds from your savings account into your checking account using online banking. However, if one were to drive to one's bank--in my case, the nearest branch or ATM is one town over--and withdraw the funds in person and then deposit them into one's checking account, one would not be charged a fine for doing so. How this makes any kind of sense is beyond me.

In my case, I have direct deposit so my paychecks go directly into my checking account. Then, each month I have three auto-transfers that go into my savings. I had been overenthusiastic in my savings plan in April and so I also transferred another significant sum over to my savings because I didn't want to be tempted to touch it. Plus, it earns a teensy bit of interest while it sits in my savings, so it seemed to make sense to leave it there rather than in my checking account. However, I had some unexpected expenses, medical and otherwise, and wound up transferring some of that money back into my checking account to cover my bills.

I made eight transfers altogether, so by the time I received the letter informing me of the regulation, I had already been charged $40.

Today, I called the bank and talked with two snarky customer service representatives. The first offered to give me $20 back as a one-time courtesy, but told me I really should have paid more attention to my Deposit Account Agreement. Who reads that? I said. She maintained that I should have. Then she reminded me that it's a Federal regulation, not the bank's. But you set the fees, not the federal government, right? It was the bank's decision to charge me $20 for transferring $25 from my saving to my checking?

I also argued that I should have been notified in some way that I was going to be fined if I completed the transaction. I was polite, but adamant that the whole amount should be refunded. Since I couldn't get any farther with the first person I spoke with, I asked to speak with a supervisor. I sat on hold listening to bad music for about four minutes.

When she came back, the first person was cordial and let me know that she had already credited my account for half of the fines ($20), so at least I could rest easy that some progress had been made. The supervisor was unpleasant. She pointed out that on the transactions page there is a hyperlink that is "clearly" labeled "What are my transaction limitations?" I told her that I assumed that had to do with the dollar amount, and that it didn't occur to me to click on it since I was only transferring small amounts.

She gave me a really hard time, but since I wouldn't hang up, she finally cut me off and said, I don't mean to be rude, but I'm going to tell you we will never do this for you again.

That's fine, I said. Now that I know about the regulation, I'll handle my banking differently. Had I known that I would be fined for transferring money from my savings to my checking, I never would have done it.

I thanked her for her help and we hung up.

Two hours later, the credits have not posted to my account. If they haven't shown up in a couple of days, I'll check back, I guess. I wrote down the names of the women I spoke with, but hopefully I won't have to go through all of that again.

I guess the lesson to be learned here is a) apparently in the U.S., one can't withdraw money more than six times per billing cycle from one's savings account, unless one does so in person and b) it's worth it to make a phone call and be polite, but persistent when one is charged a bogus fee.

Labels: ,