Overdraft 'protection' bites again as banks keep gouging the customer
Patrick Murphy is a prime example of how banks are still out to do what they can to get your money via overdraft "protection" in the name of helping you.
According to the Times Union in Albany, N.Y., Murphy's checking account was accidentally charged by Sirius radio.
The satellite radio provider refunded the money but not until after Murphy used his debit card thinking the cash was there.
In the process, he racked up $140 in overdraft fees as his bank, First Niagara, first deducted his more expensive purchases over a two-day period before deducting the lower buys.
And First Niagara refused to refund the fee money, even when Sirius admitted its mistake.
"Generally speaking, we do highest to lowest, because customers typically want the most important items paid first," Lynn Sauro-Vinal, a First Niagara vice president, told the reporter.
What a load of bunk.
There's nothing about deducting highest purchases first that helps a consumer.
No, it helps the bank put people in the red faster, where the bank can assess fees.
Even after the Fed banned banks from automatically enrolling customers in overdraft protection services that don't protect anyone, banks rolled out big marketing plans to get consumers to opt in.
Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Capital One and PNC have all been caught up in legal battles for this high-first/low-last policy, but it's not illegal.
Frowned upon by the Fed, yes, but that means squat until there's an actual law stopping banks from this awful practice of deposit ordering.