back-words... banking frustrations...

*** this is almost more of a multi-part blog as i had additional follow-ups posted.

Friday, November 7, 2008
banking frustrations...
Recently, I came across a situation with my bank charging me a $50 penalty fee based on an error they made. I don't know about the rest of you, but I don't like having my money disappear unless I knowingly and willingly spend it. I thought I would share my note to them. I have yet to receive a reply. By the way, the subject line of my note to them was "NFCU makes an error and I eat a $50 penalty fee..."


Hello,
As you can infer from the subject line, I am very upset with the way NFCU has been keeping track of my account. Not only did I opt out of paper statements since my accounts are now accessible online, but I check my account on a regular basis to keep track of my balance standing so that I may ensure I do not over draft my account. NFCU, on the other hand, does not seem to live up to their promises.

If I were to overdraft on my account NFCU used to allow such a thing as long as it wasn't by too large of an amount and I would always replace the missing funds within a day or two, max. These days, NFCU will automatically prevent an overdraft from happening during the transaction at the sales location, be it online or at a store. At least NFCU will usually do that- not always. NFCU is also supposed to display pending transactions to my acount, but often those pending transactions will disappear a day or two before they are posted, thus making my account appear to have more available funds than what it actually has.

This discrepancy is a gross inconvenience when I make a point to ensure I have available funds before I make a purchase. Under the presumption that NFCU account tracking is accurate and up to date, I make a purchase. Only later, such as today via a letter in the mail, do I find that I have been hit with penalty fees amounting to $50.00 for two transactions totaling less than $22.00 that should have been able to clear based on NFCU's accounting.

Another situation like this happened a little while back where I was waiting for an e-check to clear. It was listed as pending for days beyond when it was supposed to clear. Then the pending listing was gone and I saw I still had available funds for another transaction (which I made) and I find myself hit with another penalty fee for overdraft, of all things.

Today's alert of a penalty fee hits particularly hard. I confidently conducted transactions under the presumption that NFCU was keeping my account balance accurate and thus I had funds available. Instead, I find this was apparently an inaccuracy and now my sharecheck account is showing a negative balance and NFCU withdrew what little I had in my savings account, which of course didn't even compensate for the $50 penalty that I feel I've been unjustifiable awarded. If anyone should have a penalty fee, it should be NFCU for not keeping better track of my account balance.

These days, I conduct all my transactions electronically. This should make it considerably easier for NFCU to keep my account balance as accurate as possible. I also find NFCU's arbitrary decision to charge $25 as a flat penalty fee regardless of penalty amount to be in gross abuse of its account holders. What if I had made 5 small transactions that day? That would have amounted to $125 in penalty fees! Does NFCU think that is fair? Surely, I hope not.

For years NFCU did not conduct business this way. My entire family has been using NFCU for generations and I feel NFCU has been slowly declining in appeal in recent years. It's frustrating to me to see this happen. If NFCU will not relinquish such a short leash on its account holders, the least NFCU can do is keep the account holders' accounts accurate! If NFCU cannot keep an account holder's balance up to date and accurate, then the penalty fees should be reconsidered. The reason I am faced with these penalty fees is do to NFCU's own error in displaying my account balance incorrectly. Therefore, I would like to see these penalty fees removed as they affected both my accounts adversely. Thank you for your time and attention to this matter.
Sincerely,
Scott Cherry

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I have a reply from my bank and it came the very next day- imagine that! Interestingly enough they removed the $50 penalty fees from my account. However, they also contradicted themselves more than once. They said it was a one time courtesy and its is in fact the second time they have removed penalty fees they charged in error. They also said they prevent overdrafting the account balance and yet they clearly dropped the ball because they failed to keep my account balance accurate and up to date when i had double-checked prior to making purchases. In essence, They said, "we're wrong, but we will pretend we are not wrong and we will more than likely make this mistake again at your expense. Without further ado, here is their reply...


Subject: NFCU makes an error and I eat a $50 penalty...
Navy Federal Response 11/07/2008 : Thank you for using Navy Federal Online. A review of your account indicates that on 3 November 2008, PAYPAL INST XFER tried to debit your account for $5.93 and $15.94 but they were returned due to insufficient funds (NSF) and your account was charged $50.00 in NSF fees. Please understand that each time the amount of a Visa Check Card Point of Sale (POS) transaction is processed and exceeds the balance in your checking account, your account will be charged $25.00. Each time a check/ACH debit is presented for payment and returned for insufficient funds, your checking account will be charged a fee of $25.00.

As requested we have waived $50.00 NSF fees as a one-time courtesy. Please note that Navy Federal will not waive any further fees unless a fee is charged due to our error.

Please note, when a member makes a purchase with a Visa Check Card, the merchant usually sends through an authorization request which is approved or disapproved. If approved, a one-day hold is placed on the checking account for the amount of the transaction. The following day, the hold is removed and the funds are returned to the checking account. This is a standard operating procedure with many financial institutions. After the hold "drops" off the account, you have the opportunity to "use" the funds again until the transaction actually posts. Since the merchant is responsible for submitting the transaction for payment, Navy Federal has no control over the amount of time this may take, in some cases, it may take several days for the actual transaction to post to the checking account.

If you have any other questions or concerns, please let us know.

Posted by scott on Saturday, November 08, 2008 - 9:33 AM

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imagine my great dismay when i woke up this morning to find my banking institution had fucked with my account again. theyve done a better job of trying to cover their collective ass this time, yet they still contradict themselves plus the overdraft service they offer is supposed to already be covering me. does acquiring it again make life magically delicious? i think not...


Your Message 11/13/2008 : What are you doing to my account??? you just took out $50 dollars again today and I have not been conducting any transactions since I last communicated with you. I have had no notice of and failed transactions, nor any any other problems. Please stop removing $50 dollars from my account! You are supposed to refuse transactions that would overdraft my account when there are insufficient funds, not let people overdraft my account and then charge me for it. This is only few days after my last correspondence with you. Frankly, I feel like I need overdraft protection from NFCU! I've never felt so violated! Leave my account alone!

Subject: NFCU makes an error and I eat a $50 penalty...
Navy Federal Response 11/13/2008 : Thank you for your follow up message. A review of your account indicates that on 10 November, the available balance in your checking account was $1.53. On that day, PAYPAL INST XFERT tried to debit your account for $5.93 and for $15.94, but they were returned as NSF and your account was charged $50.00 in Return Check Fees.

Please be advised that when an item has been returned to the payee's bank, the payee is permitted to submit the item for payment as many times as necessary until it is paid; therefore, you will need to obtain the status of the item from the payee. Each time an item is presented for payment and is returned for insufficient funds, your checking account will be charged a fee of $25.00 the next business day.

Please note that we are unable to waive any more NSF fee as we have already waived $50.00 in Return Check fees for you as one-time courtesy. It is your responsibility to ensure that sufficient funds are available at all times in your account in case an item is presented for payment.

Our NAVchek Line of Credit service provides overdraft protection for a checking account and allows access to the credit line directly without first having to deplete the checking account balance by the negotiation of special NAVcheks. This service is available in increments of $500.00 up to a maximum of $15,000.00, subject to Credit Committee approval. The annual percentage rate (APR) on a NAVchek Line of Credit is 14.9%. The minimum monthly payment required on a NAVchek Line of Credit is 2% of the total outstanding balance shown on the monthly Statement of Account or $20.00, whichever is greater. If the account is over limit and/or past due, these amounts will be included in the amount billed on the statement.

You may apply for a NAVchek Line of Credit online by clicking on "Checking" located in the center of our Home page. When the next screen appears, click on "NAVchek Overdraft Protection" and "Apply Now" to complete the application. If you prefer, you can call 1-800-336-3333 or 703-255-2626, 24 hours a day, seven days a week to apply. If your NAVchek Line of Credit request is approved, we will mail a NAVchek Line of Credit Agreement and Disclosure for you to sign. It cannot be faxed to you or printed at a branch. Once we receive your signed agreement, we will activate your new line of credit and make it available for your use.

If you have any questions or need further assistance, please let us know.

Posted by scott on Thursday, November 13, 2008 - 5:32 PM