i fought the man and won: overdraft survival stories

Flickr: Creative Commons by Joe Shlabotnik

We all know someone who’s had a $35 cup of coffee.

No, this isn’t a kids-these-days rant about the coin required for a fancy-schmancy latte (extra foam, extra hot, non-fat, please). This is about cold, hard, overdraft fees.

Read tips and tricks to avoid overdraft fees (hint: don’t overdraw your account), and battle stories from college kids who fought the man and won at Politics Daily or behind the cut.

Debtors’ Revolt: True Stories of Overdraft-Fee Survivors

We all know someone who’s had a $35 cup of coffee.

No, this isn’t a kids-these-days rant about the coin required for a fancy-schmancy latte (extra foam, extra hot, non-fat, please). This is about cold, hard, overdraft fees.

You don’t even have to be a caffeine drinker to fall victim to them. Even those who pinch pennies can’t escape their grasp.

The Federal Reserve says that banking institutions make between $25 million and $38 million annually from overdraft fees. Bank of America, which received billions in government bailout money, is notorious for its merciless $35 overdraft fees. //

Congress said this week that it has had enough of the charges, which can quickly add up to hundreds of dollars, since cardholders are enrolled in a misleadingly named “overdraft protection” program. This program lets the cardholder keep spending, even if there is no money in his account, all while assessing a fee every time the card is swiped.

Both chambers have proposed new rules such as capping the number of overdraft fees to six a year and requiring that banks explain to consumers how their accounts work. Months ago, credit card legislation was passed that will tidy up exploitative interest rate changes and improve communication between banks and account holders.

Consumers have been loud in their protests of faceless megabanks such as Bank of America. One woman, Ann Minch, posted a YouTube video calling for a “debtors’ revolt” after BofA raised her interest rate from 12.99 percent to 30 percent for no reason. Minch had her interest rate lowered, but the frustrations and revolt live on, from the marble halls of Congress to the dingy carpeted halls of a dorm near you.

A college-age friend in Oregon said he was once charged $500 in overdraft fees at BofA, all for food. What he thought were $1 bottles of orange juice on his way to work ended up costing him $36 each, as well as the drama of trying to reverse the fees.

“I went in to scream at them,” he said, “and quickly figured out that this was just their way of trying to sell me a line of credit. Thus, I opened a line of credit and had them waive the fees.”

The next day, he went back to the branch and closed his account. “Damn criminals,” he said.

Another friend, whose name rhymes with Wase Kickman, thought she had it all figured out. After an overdraft mishap in August, she called Bank of America’s customer service line and asked them to change her account so that her card would be rejected if there were no funds to access.

The Rolling Stones song is right: you can’t always get what you want. In early November, her card was rejected when she was trying to buy a 99-cent bean burrito at Taco Bell. She checked her balance on an A.T.M., and her account was more than $600 in the red, days after she had deposited her food money for the month. She called BofA and was told that while a note had been flagged on her account to reject her card, no change had actually been enacted, and nobody at the bank would take responsibility for it.

Hours on the customer service line led to no refunds, and some acidic hints that she should invest in a ledger. What it took to finally get a refund: sitting in front of a branch vice president on the verge of tears.

For another friend, this one a graduate student, the battle is ongoing. Joe found out that he was in the red about two weeks ago after a delayed gym membership fee hit his account. He transferred money and went on with life as usual until he chowed down a chicken burrito at Chipotle, effectively eating the rest of his funds, unaware of the other charges that hit his card all at once.

“Then Bank of America got really greedy,” Joe writes. “So on Monday, when I did the cover transfer, my balance stood at $67.17. That’s when they hit with four $35.00 overdraft charges for the Marriott and the other three. The second ‘overdraft item fee’ caused my account to go into the red. That’s right, my account was fine, and THEIR overdraft fee put it back into the red. Then the third and fourth charges hit, for a total SO FAR of $120.”

Joe is up to $280 in fees, and when he went to a branch in person, he was told that only $70, tops, would be refunded. The teller he spoke with didn’t seem amused by him saying that with the $50 billion in bailout the bank had received, they certainly didn’t need his extra few hundred bucks. He was given the name of a special services representative, but not her contact information, and told to wait.

“And the irony is that I would switch banks but I have so many bills lined up to pay on the auto system that it’s just not worth it at this point,” Joe wrote. “I’ve read that BOA does business with half the country. [They] can be as [greedy] as they want, it seems, with such a captive audience.”

A call to Bank of America officials Friday was not returned.

For those of you facing your own debtor’s revolt, the only cure is persistence. A few pointers:

- Hit “0″ until you get to speak with a real live person.

- Show up in person, if you can.

- Be persistent. They can reverse charges, you just have to make them want to.

- Once you’ve cleared your charges, clear your account. Take your business to a local bank or credit union instead. They may charge A.T.M. fees, which are a pain, but they’re ultimately worth the service you get, where someone is held accountable for your finances.

- Once you’ve found a new place to keep your money, sit down with a representative and make sure you understand all terms of your account-interest rates, overdraft policy, online banking, everything. Then invest in a (sigh) ledger.

- If all else fails, I can redirect you to the waterworks.

Good luck, and I’ll see you at the credit union. We can swap stickers for our ledger covers.

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