Agave Mountain

Usually, whenever I hear the anguished complaints of evil banks slamming people with onerous overdraft charges, I'm first to roll my eyes and say you should be more responsible with your money.  After all, I have canceled most of my credit cards, paid off all of our debt, and am frugal.  That would never happen to me. 

Last weekend, I deposited my monthly paycheck at the local US Bank branch-- as an ATM deposit.  This would turn out to be one of the biggest banking mistakes I have ever made.  It turned into a bitter life lesson and a week long headache.  If you are contemplating making a deposit at the ATM, don't do it.

It wasn't until my debit card was denied (Tuesday) at a merchant that I got a hint that something was wrong.  The actual worlds the clerk used were: "the bank told us not to honor your card."  Embarrassed, I paid with cash and left.

As I logged onto the bank's online portal, I was shocked to find out that my account was now negative, to the tune of over two thousand dollars.  Not only had the deposit been reversed, but an additional amount of money equal to the face amount of the check had been removed from my account.  In banking parlance, a had a double hold on my funds.

No problem.  I would just call and have the hold removed from the account before any damage was done.  I fully expected that the issue would be resolved within an hour, based on my interactions with other national banks like Bank of America, Bank One (now Chase), and local banks that I have had dealings with.  Any other time I have had a problem with a bank hold, I've been able to get them removed immediately.  So I picked up the phone and began the adventure.

My first call was to the local branch where I deposited the check. 

Teller #1 told me that there was nothing she could do and that I should just call back in a few days.  I insisted on speaking to someone else.  She transferred me to Robert. 

Robert calmly and nonchalantly explained that the deposited check must have been rejected by the ATM department, and that because of federal law that they had to put a hold on my account.  "They deal with a lot of check fraud," he offered.  He also stated that they would mail it to me.  When I asked how long that would take, he said "...up to three weeks."  I was dumbstruck.  As I recovered, I asked about the overdraft fees that were inevitable.  "We might refund those overdraft fees."   He recommended calling back in a few days to get the overdrafts reversed.

At that point I started to get mad.  For three weeks they are going to hold my paycheck and slap me with overdrafts that you might refund?  WTF?  I don't think so.  I calmly (as I could) explained that we have two separate issues: 1) for whatever reason the bank has my check and I want it back as soon as possible, and 2) US Bank has placed a hold on the money that was in my account before the check was deposited.  Making the deposit has become punitive.  I want the hold removed immediately.  He suggested I call the 1 800 number to see if they could track down the check in the "ATM vault."

After several more phone calls, I was given the bad news:

• The ATM deposit was rejected, and the check was going to be mailed to me (.. and according to the personal banker, it might take up to two weeks to reach me; in fact it took a total of six days);
• Before the ATM deposit was rejected, a hold equal to the face amount of the check was placed on my account.
• When the pending deposit was reversed, the bank's computers debited my pre-deposit money, placing a "double hold" on my money.  

Frantically, I tried to get the pre-deposit balance restored.  Every person I spoke to at the branch, or the regional banking center flatly stated it was an issue due to:

• The timing of the deposit and the Columbus day holiday; and/or
• "Federal law" requires it to be this way; and/or
• "they" are picky with ATM deposits because "there is a lot of check fraud in the ATMs." (usually there is a pause here, almost as if they are waiting for me to say, "you got me... boy you guys are good."  WTF?).

Each one of the bankers was sympathetic, readily admitting that it was a bank error -- but there was nothing they could do to to fix it.  The holds would "drop off" my account in a day or so anyway, and at best they could only do a "memo" credit that wouldn't appear until the next day.

The next day I login and saw that the hold was removed and my balance was positive once again.  I saw that a check I wrote to TCF bank was rejected and paid.  I called US Bank and spoke to Robert who told me, "the normally don't refund charges at other banks."  Nice. 

On Thursday, I logged in to see that debit card transactions that had been swiped up to five days earlier are now approved, each one kicking off a $19 overdraft -- seven in total, for a total sum of $133 in overdrafts.  All of the transactions were immediately processed when the account was negative.  I had to call back once again and talk to Robert who said they would take care of the overdraft charges.

On Friday, I took the paycheck and went into the bank to cash it.  Not deposit it, but cash it.  The teller took the check and disappeared.  As I looked over, the teller was talking with Maria (one of the people I spoke to on the phone).  I was expecting her to come out an apologize.  No apology.  The teller just needed special approval to give me the cash.

On Saturday, I went to TCF bank to inquire about the check I wrote out for cash to deposit in our new savings account.  No fee was charged, but an extended hold was placed on the money because US Bank denied the first attempt at satisfying the check.  In order to remove the hold, I had to drive back to US Bank and get the branch manager to write up a letter that basically said they paid the check and the funds are in the bank.

Post Mortem

So this morning I took a moment to recount this story and to reflect on what went wrong and what I could have done better to resolve it. 

ATM deposit = check fraud.  Unless you are committing check fraud, there is no reason to deposit a check in an ATM.  Every single bank representative associated ATM deposits with check fraud.  There are even classes on how to reject ATM claims.  When I dropped the words "ATM deposit" from my introductory monologue (each time I talked to yet another person) they responded much more favorably.

ATM deposits can take months to resolve.  Chase bank has a complaint form that mentions a timeframe of 120 days after money goes missing.  Amazing.  There are some interesting stories on the Internet that stretch over the course of weeks to resolve.

Banks are mercenary about overdrafts.  Debit card transactions that took place over the scope of the week were suddenly all processed immediately when the account was negative.  Even though they were refunded, I have no doubt that the transactions are reordered and processed to the bank's advantage.  Even more surprisingly was that a hold on funds in the account would cause this financial carnage.

You want to complain?  Several times I asked for what regulator I should complain to.  Not once did any U.S. Bank employee give me a name, telephone number, or even the name of a regulator agency to complain to.  I would ask is it the office of the comptroller of currency?  Fed?  They would change the subject immediately.   Answer: for national banks is the Comptroller of the Currency (and the state regulator body)

Figure out if the person has the authority to fix the problem. If not, find someone who does.  After thinking about it, and reviewing my notes, it dawned on me that I got trapped in mired in a layer of customer service agents that don't have the power to correct the issue.  I should have immediately asked to speak with the branch manager and escalated from there.  I allowed the financial automatons to investigate and call back.  The end result was a call at 4:30 PM saying there was nothing else they could do.

Cash is king.  Seriously, I now understand why people in the 1930's hated bankers and buried their money in coffee cans.

Labels: Scams

Posted by Joe Turner on Sunday, October 18, 2009 at 2:26 PM | Permalink