Bankruptcy

Ripped Off by the Banking Industry

By Debb Thorne

    Bankrupt folks who participated in the Consumer Bankruptcy Project 2007 had the opportunity to complete a telephone interview. For the interview, they were paid $50. Respondents who shared particularly heroic and inspirational stories could be nominated by the interviewers for additional compensation. Denise McDaniel, one of our interviewers, nominated Erica Stevens (not her real name) for this "award." Little did we know that Erica's bank would take this opportunity to rip her off.

    Here is an excerpt of what Denise had to say about Erica when she nominated her for the extra compensation: Erica is 46 years old and suffers from end-stage multiple sclerosis. She was diagnosed about 10 years ago and given 5 years to live. Over the past months, we have shared a lot. Sometimes when I called, her speech would be very slurred and I would know it was a bad day. Then, other days, I could barely tell she had any health problems at all. In spite of her illness, Erica looks past her own misfortune and sees the positive things in life and others. She is very brave and strong and creative and incredibly unselfish. She takes in stray kittens, cooks home-made soup for her elderly neighbors, rolls pennies to buy gas for her husband's truck, and even gets her antibiotics from her veterinarian if she can, so she doesn't have to spend money on a doctor's visit."
    Based on Denise's nomination, we sent Erica an additional $100. What should have been a very positive thing turned quite unfortunate, thanks to the greed of Erica's bank. Denise sent the following email to me a couple days ago:  "She [Erica] got her check a couple of days ago and had her husband deposit it in the bank.  They barely cover expenses each week so she was thrilled to encourage him to put more than $10 gas in his truck, pick up some milk and bread at the grocery store, pay a little bit on a bill they owed, and buy another item they needed.  Then when she checked their balance at the bank yesterday, they had over $100 in overdraft charges, something like $33 for each of the items he had bought.  She called the bank and they said they were holding the Harvard check for 5 days, so it wasn't available for them to spend when he made the purchases.  She asked to talk to a supervisor and was transferred here and there and finally she said she was hooked up with someone she was sure was in India, because she could barely understand her.  When she insisted that they had never held any other checks on their account, the lady told her that they often do that for checks from out of the country.  Erica asked her where the hell she thought Harvard was and then just gave up."
    Two specific points here. First, why in the world is holding a check drawn on a leading bank common practice? My guess, although it is simply a guess, is that it provides a beautiful opportunity to nail families with overdraft charges. What a windfall for the banking industry. And what an unethical practice. If my memory serves, checks I write are deducted IMMEDIATELY from my account--thanks to technology, it simply is not possible to float checks anymore. Yet deposits I make are not recognized for days. Why???
    Second, $33 for a single overdraft. What the heck??? Who in their right mind thinks it is acceptable to charge that? And why in the world aren't our elected officials calling hogwash on this? If Obama and Clinton want to take a stand that will resonate with the average American, I'd suggest taking the banking industry to task for this practice. It's unethical and it should be illegal.

Full post as published by Credit Slips on February 24, 2008 (boomark / email).