Getting screwed in New & Interesting ways by Bank of America.

If you are a B of A customer, the following paragraph was on the front page of your most recent statement:


Now, since merchants don't TELL you how much of a "hold" they are putting on your card (and in the case of gas stations, the clerk probably wouldn't even know what the hell you were talking about), How will you know exactly how much your "available balance" is? In other words, if you are, for example, a struggling college student, with an undeveloped credit rating and a smallish balance, and spending habits that might include using your debit card at the soda machine in the hall, How can you protect yourself from "fees & penalties"?

I called the Customer Service number.. battled with the phone tree until I got a human being and asked her. WE went round & round a couple of times before she understood what my problem with the new policy was, then she agreed with me. She admitted that the depositor would have no way of keeping track of the "available balance" until all the paperwork was completed and the full transaction was no longer in the "pending" category.

She said she would bring up the problem in the next "meeting" and encouraged me to "encourage others" to let the bank know that this is a bad policy.

Yup -- can shoot you down the black hole of credit-shredding, via hidden bank procedures. Then you have the domino effect of other cards noticing the problem you are having with that card, and your credit turns into the grease that shoots through a goose.

Only recourse -- don't USE plastic except for extreme emergencies. My opinion, YMMV.

and use that. If you run out a day early, then it's ramen at home and water from the cooler at school, big woop, you will survive it.

This new policy is meant to generate fees from small depositors. Those junk fees are the only way banks make money on people who routinely keep less than $1000 in an account.

They insisted on holding a check from an escrow account from a local bank for a full 7 business days before i could make a within BOA transfer.
When I insisted that they would have the funds overnight from this bank and offered to give them an extra 2 days, the manager shrugged his shoulders.
They lost 5 assorted accounts from me. the jerks.
At any rate, the other bank was happy to credit me the next business day and they were very pleased to get all of my business and personal accounts.

I am a lawyer and deposited a $1.1 million bank treasurer's check to my attorney trust account and made a disbursement of $750,000 to pay off the mortgage of the seller in that real estate purchase transaction. The check was returned as written against "uncollected funds". Their explanation was that they have a "10 day hold" on all deposits of over $5,000 no matter what the source.

I literally screamed at the Bank of America manager at my branch and he quickly arranged credit to my account the next day. Luckily for me the bank I was paying off redeposited the check after I contacted them without charging me interest for the 3-4 extra days it took to payoff the mortgage.

The next day I took all of my business accounts to Commerce Bank where they always give you next day credit and certainly on bank checks.

It's a FRB rule.

Questions:

1. Where was the check from? Was it local bank within your FRB district?

2. Did they tell you up front there would be a hold on the check, because they are supposed to tell you if they are going to place a hold on the check.

There was supposed to be an order on my account to get overnight release of funds...but looks like that was changed or ignored.

This was a substantial deposit too and the teller graciously told me that I would have $100.00 available immediately. ONE HUNDRED DOLLARS??? The amount deposited was several thousand times that amount.
This is beyond insane.

Same bank would not deposit a $100 check from my father to me because it was a two party check.I asked them to look at my accounts with them and see if they thought that I posed a risk on the $100 check (on a local bank). Obviously they did. My father had to deposit that check and send me another one.
The bank has lost it's way regarding customer service.
And because of it, they have lost you and me both.

I work for a major bank in California. Right now my bank does image exchange with BofA, Wells Fargo and other banks. Which means the deposited check reaches it's own bank same day ... most of the time.

Granted there are limits that tellers and bank managers have to approve to over ride a hold ... in this day and age the whole concept of "float" is becoming a thing of the past.

The passage of the Check 21 bill opened the door for banks to do image exchange between banks. BUT the FRB (Federal Reserve Bank) has not relaxed their rules as far as the UCF (Un-colled Funds Holds) go. It depends on the bank. Many of the smaller local banks might not yet have the ability to image exchange with other banks, so the Fed can't make a blanket rule. BUT bank employees should have the knowledge of the clearing system they use. So an override of a hold can be an option.

It's confusing, I know. But I've been processing checks since 1982 and the market is changing everyday it seems.

How hard is it to know that you have $100 in the bank and when you've 'debited' away $100?

Say you've got $100 in the bank, and you go to the gas station and use the debit card to get $60 worth of gas (it could happen). Now suppose the merchant has put a $70 hold on the account to cover that $60 with a little to spare. They can do that. You may think you have $40 you can spend... you go over to the 7/11 and try to buy $35 worth of Slim Jims. . Your card will be refused.

Of course in this case you could just walk away without your Slim Jims.. but in an online purchase, the might process it at the transaction would bounce... and you would be liable for fees etc.

Do you see the problem yet?

I suspect they would allow that $35 purchase in order to hit you with another $20 or more in overdraft charges...
??

I have a Chase debit card, need to check if they have done the same thing.

don't use a debit card to rent a hotel room, sometimes the hold is as much as $3000! until they get around to putting thru the entire amount, argh!!!! -- i'm a budget traveler and that $3K could be way more than what i would spend on an entire trip

i like to use a debit card in my travels to get the local currency, however, i can't use the same card to hold my hotel room or when i check in, my debit card goes blooey and is unavailable for atm use for 24 to 48 hours -- i've heard other people say they couldn't use the card again for a WEEK

you know you have the $$$ in the account, you just can't get at it


however it's standard policy w. all debit cards, certainly nothing new or special w. bank of america, they've always done this, why send out a notice now about it? beats me!

I understand your point, I only use the debit card for petty cash type purchases...and it's tied to a regular checking account so I can write paper checks when necessary but I pay most bills online, it costs nothing.

some people have complained in recent years that they got trapped overseas w. no money because they didn't know about the policy, many boa decided to get on their hind legs and make the policy explicitly known to all card users?

i only use my debit card when traveling in foreign countries, where it is a necessity since traveler's checks have become too expensive

I still sometimes use my debit card to pay for a hotel room when I'm checking out, but I never use a debit card to make a reservation, have them hold the room or when checking in, for the reason you mentioned. The hold can be much, much more than the cost of the room, and they aren't, I hear, always timely about putting the correct amount through.

Debit cards may make it a lot more obvious/painful.

Rental cars, particularly outside the USA, would often put a hold on several thousand dollars on a credit card. It meant you could not use a small-balance credit card to rent a car and then do anything else. A $5000 hold could really screw up someones two-week vacation!

When I was doing that a lot, I used my AMEX in those situations to avoid being without a working credit card. And after about $15-20,000 of charges in a month or so, even AMEX wanted to be sure that I and my card were traveling together (and BTW had I made provision for payments while I was gone).

tying up cash that you actually have in the bank, but yeah, I agree that it isn't anything new. It's one way the debit card isn't as convenient for everything a credit card is useful for, but for the most part I think the debit cards are great.

and every single one told me when I made the reservation how much they were charging my card to hold the room.

just that the hold amount can be more than the price of the room.

One charged for 2 days when I checked in. Not a problem for me. Guess I lucked out.

Usually if they block an extra amount (in my experience, anyway) it isn't for extra days, but just incidental costs (phone calls or room service, for instance). But hotels/motels don't always do it.

That's the way to do it. NEVER use a debit card for a reservation. Use a credit card. If you want at the time of check out ... use your debit card. I'm lucky at this point in my life I'm able to pay the damn credit card off at the end of the month .... it's all about the airline miles!

this doesn't happen. The hold is appropriate for the money spent. At least here.

And chose to put it on a credit card instead of debit. Even though I had already pre-paid for the rental (because it was arranged on Hotwire), had I used my debit to secure it at pick-up, I was informed they were going to put a $300 hold on me.

not debit cards. Some even refuse to take them.

NYS has consumer protection laws, where car rental agencies are concerned.

http://www.oag.state.ny.us/consumer/tips/auto_rental.html

"You do not have to have a credit card to rent a car in New York. However, if you do not have a credit card, the car rental company may require you to go through a screening process that can take up to several days. The company may require a cash security deposit as well. If you do not have a credit card, check with the car rental company well ahead of when you want to rent to find out what its procedures are for non-credit card rentals."

:wtf:

It only comes into play when you prepay for things, I believe--if you pay at the pump for gas, for instance, the store doesn't know how much gas you're going to purchase, so can block a set amount (say, $50-100) to make sure that you have the money in your account to pay. If you then only buy $10 worth of gas, the actual purchase will replace the hold, but not necessarily immediately.

If you pay for your gas after pumping (or go in and give them your credit card in advance to purchase a specific amount) then this shouldn't be an issue, because they simply charge the purchase amount.

(a) their balance was at a point where it created a problem, or (b) they religiously checked their available balances immediately after pre-paying for gas, before the hold was converted to a charge. Most of the time it isn't an issue.

With the gas example--once your tank is full at, say, $30, they replace the $50 block with the actual $30 charge. The full amount of the block is never actually taken out from your account, your bank just sets it aside to make sure you can cover the (initially unknown) amount of the actual charge.

It doesn't show up on your actual statement, though depending on your institution, pending holds might show up on your account activity if you can check it online.

I think restaurants actually do the same thing--if your bill comes to 20 bucks and you pay with a card, they will run the card for, say, 25 bucks, since they don't know how much you will tip. Then when they find out the actual amount that you tip, they replace the hold with the actual charge.

What a scam. I guess I need to keep a little extra in my account. And I do normally try to do that. But for anyone on a fixed income, this could be a disaster.

and I'm glad you found the info useful ... it's certainly something good to be aware of. When I got my debit card I signed up for an automatic overdraft protection deal, just in case. It doesn't cost anything unless I actually overdraft, and then it automatically charges the balance to a credit card--there's a fee involved if that happens, but it's like 5 bucks or so--certainly beats the typical overdrafts, plus extra merchant charges, plus the hit to the credit report.

Here's some info I found on the FTC web page about the whole "blocking" thing ... http://www.ftc.gov/bcp/conline/pubs/credit/credbloc.shtm

Plus, all hold amounts are available to view online nearly instantaneously, at least with my BoA accounts.

Are they always for the exact same amount as the transaction? Those are "pending".. they are not the amount of the "hold" that the merchant may (or may not) have put on it.

Usually it is only gas stations, hotels and a few other type transactions that use them as a rule...
The point is that you have no control over that amount, and you have no way to find out what that amount is.

it DOES show the hold amount, even if that's different than the purchase amount, which it has been in a few cases.

EDITED TO ADD:
And, as the poster above surmised, debit charges that would lead to an overdraft are NOT refused.

you don't know how much you've debited. I once purchased gasoline w/my debit card in the morning (under $25), then in the afternoon tried to pay for a $5 order at Starbucks. I had $200 in this account (it's my slush fund). My card was refused at Starbucks. :grr: Fortunately, my credit union doesn't play this BS game. Yet.

dg

actually limit the number of withdrawals you can make via personal computer in a month. Only SIX transfers or withdrawals allowed. So if you like making piecemeal payments out of your savings, watch out!

there is a reason they have different names and policies after all, in my savings account i get a MUCH higher interest rate and the point is to encourage me to save and keep the money there for BIG transactions anyway

i don't want checking and saving accts to be treated the same, interest payments on checking accts are shitty by comparison

That's outrageous -- it's YOUR money! Are they using identity theft as the *reason* for limiting access to your own money?

At least, that is how my credit union works. We only get paid twice a month, so it really isn't an issue - I generally move money three to four times a month to the savings account.

.... I need to read up on the implications, especially this 'witholding' thing. I buy stuff online all of the time with my debit card. I need to go and look and see if they're sticking me for extra fees as a result when this ting kicks in.

If our Democratic leaders had ya-yas to take on the bank, cable, and utilities lobbyists, you might see them pushing for a suite of consumer protections, like a 'Consumer's Bill of Rights' to protect against stuff like that.

I know I may sound real old school here, but why not use cash instead of a debit card?

With cash, you know exactly how much money you have.

It sounds to me like using a debit card is just a lot of unnecessary hassle and expense.

I use my ATM to get cash -- and then use the cash to buy things -- like soda from soda machines.

I find that it saves me a lot of hassle.

And I avoid the "fees and penalties", too.

to reserve a room at a hotel online?

I would not use cash to reserve a room at a hotel on-line.

That's not exactly the situation you presented in your original post. Your original post had more the thought of occasional purchases (like a soda machine in the hall).

For reserving a hotel room on-line, though, I would first use a credit card. I have never had a credit card charged until I actually used the room I reserved.

I, though, I needed to use a debit card, I would somehow get in touch with the hotel or hotel chain involved, and ask them two questions.

The first question I would ask would be exactly how much of a charge they would be making to my debit card.

And the second question I would ask is exactly when then would be making that charge to my bank.

Based on that information, I would plan to use the rest of the money in my bank accound accordingly.

If I could not get the information, I would perhaps reconsider my travel plans.

Use a debit card for the gas pump? If you put the card through, they will put a big hold on it, whether you are filling up or just topping off the tank.

As I said, ASK for the information that you need in order to manage your financial affairs.

If you are unable to get that information, then don't do business that way.

You do not have to accept businesses not providing you with the information you need.

You can, as someone else has suggested, get a pre-loaded credit card and use that instead.

Or, you can do business with companies that do provide you with the information you need.

Or you can shop around until you find a bank that has different business practices from those the BoA uses.

what you were talking about. The hold is automatic and built into the system, the clerk has nothing to do with it.

Like I said earlier, use CASH when you can.

You can certainly use cash as at gas station.

I know I do.

But for those situations (like reserving a hotel room on-line, or renting a car) where using cash is not an option, there are still other options.

...but if you are a mom with young kids in the car, it's a lot easier to "pay at the pump" instead for dragging the sleeping kids/babies out of the car to pay the tab. When my kids were little, it was the only way.

Cheers

Is there a list somewhere of gas stations that do this?

You should not be using a debit card for any online purchases. You are playing with fire. Your bank account could be wiped out in seconds.

If you do not have a regular credit card you are much better off buying a preloaded/reloadable Visa/AMX card that is completely separate from your bank account. Those Visa cards can have fees and penalties if the money you put on doesn't get used within a certain time frame so be sure to read all the mouse print before you buy. My "big bank" offers them as "travelers checks" and there is no fee until the money sits there unused for more than 1 year, they they start stealing my money. -- Many store gift cards do the same thing.

instead of a credit card? I don't own even one debit card, but I have about seven credit cards. Used one at the dentist's office today. I should get 48 cents cash back :woohoo: Pennies, but it does add up to a little bit.

Apparently, that wasn't enough for them. :mad:

I have a differnt "big bank" and they do the same thing. Fortunately I can check my balance anytime online and they tell me exactly what all my holds are. And the hold shows up online within 30 minutes usually. I very rarely have holds anymore because I have switched to cash.

The answer is a weekly/monthly cash budget. Instead of whipping out the debit card I have a certain amount of cash every pay period for all my retailing for that pay period - gas, food, whatever. I have to pay cash, and when the cash is gone I'm penniless until I get paid. I stopped using the debit card except for at the ATM to make my monthly withdrawal (I have direct deposit)

I also pay my bills online at the "big bank" website and their system tells me exactly what I have left afterwards.

It's VERY easy to add that to online banking information.

I do not understand why any one would have a debit card with a bank like BoA.

It's business practices suck.

If I wanted to use a debit card, I would find a bank that had different business practices, and would inform its customers of what the holds are.

If I could not find a bank that provided its debit card customers with what the holds are, I would not use debit cards.

It's the law.

Even if you write a check, they run it through a reader at the register, and funds totaling the amount can be verified and of course, the amount "earmarked" for that particular check "set aside" to cover it.

Merchants don't like getting bounced checks:)

Electronic banking these days makes the old pattern of "kiting" nearly impossible :)

The secret to using a debit card is to always record every transaction and to know how much money you have, so you don't go over the limit.

There are fees associated with that.. My son swiped his card for small amounts and did not record them, and ended up paying out $20 in fees for a $1.75 purchase...because he truly did not know how much he had in the account..

I've had it drilled into my head since I was a kid .... always record you checks/purchases. The only reason I don't use a debit card or write checks is that we use credit cards with airline miles and pay it off. I'm blessed that I can do that now.

If it wasn't for the miles .. I'd write checks for things like grocery and store purchases.

I get a kick out of threads like this. People get pissed at the "evil" banks for charging them NSF fees ... but if you keep a track of your checking account this won't happen that often. People have gotten lazy and allow the banks to fuck them over with fees.

You mess up ... go to your bank and tell them what happened .... most of the time the fees will be reversed. Yeah, not all banks give a shit ... but it doesn't hurt to try and speak to some IN PERSON. That's the way it's been done for years.

account which generally are greater than your projected "final bill" of sale. Example, rent a car for 4 days at 25/day. The rental agent will hold for that 100 + the amount to refill the tank + taxes + CDW waiver + some percentage in case you decide to keep it longer. It may be available to view online; I hope you have your PC and your internet connection with you to check it out.

Hotels do much the same.

Any open-ended purchase can result in the same.

It should be given to the consumer at the time of transaction.

most of us don't know to ask.

This thread highlights that that must change.

When I rent a car, I always ask how much of a hold is being placed.

The agent has always told me.

I suppose if the agent refused or was unable to tell me, I would just tell them that I did not like their business practices, and go to another rental car company that provided me with the information.

so aren't aware of the amounts being held on their accounts.

I'm glad this thread came up so now people will know to ask.

People need to understand that they do have some control.

They need to understand that they are not totally at the mercy of the big banks and corporations.

They need to understand that they can ASK -- and that if they do not get the information they need, they can use other options.

One of the unfortunate things about the Bush regime is that it has left many of us feeling powerless and like victims.

But each of us has power -- we just need to use it.

I agree. Hopefully this thread will open a couple eyes to those facts.

:hi:

We're being pounded with advertisements that scream that banks and other companies want to make life *easy* for you - but in truth, they want you to NOT pay attention to what they are doing. The mortgage loan ads that tell you they think you are *smart*, etc. are filled with buzzwords. But then look at the small print that takes up half the TV screen -- THAT is what consumers need to look at. And that is flashed off the screen as quickly as it came up, to be replaced with feel-good smarmy advertising to make you forget that you didn't have the time to read *the fine print*.

STOP and read the fine print. DON'T place your trust in these companies.

Exactly right.

Remember this rule: If something seems too good to be true, it probably -- likely -- is.

Never -- EVER -- sign anything without reading the fine print.

And if the fine print is contrary to what the salesperson is telling you, tell the salesman that until you see it in writing, you are NOT signing.

Use the power you have!

If you get charged with NSF fees .... many times you can call your BRANCH ... not the customer service line .... and they will reverse the fees. You may have to go into your branch personally, but it's worth it. Which is why I always try and keep my accounts at a bank that is close to me. People are to quick to give up and let the bank charge them ... you CAN fight back. I'm not saying it works all the time ... but if you walk in and not throw a shit fit at the under paid bank employee ... you'll get a favorable responce.

I've used one myself as I no longer have credit cards. There's an extra form to fill out, but they will accept a debit card in place of a credit card.

If you're scraping by, it's probably best to utilize paper instruments until you can afford the undisclosed holds and numerous fees associated with plastic transactions.

giving away T-shirts to unemployed kids when they apply for cards...

the issue w. holds is that a person has the money but the "hold" interferes with your ability to immediate access all of that money

is all part of ensuring affordability.

but perhaps a tautology

My husband has a bad habit of letting cash burn a hole in his pocket (we both work for tips).I am better about it; but it is easy to spend when it is right there. The card actually helped us to save - out of sight; out of mind.
I have absolutely NO CCs; though; and never have. Hate them.

I forgot again. :blush:

This is good information for all of us to know.

Thanks, annabanana.

:hi:

This was uncovered by our local consumer guru Clark Howard. When you pay at the pump the gas station puts a $50 hold on your card and then when you are done pumping the actual charge of the gas. The hold may not drop off for 24 hours or more (sometimes it sits there the entire weekend).

The hold is a standard $50 in Georgia. I don't know if this is nationwide or varies in other states or if it varies gas station by station.

If you flirt with a zero balance regularly and plan to pay at the pump - go ask inside the gas station how much of a hold they put on your card. It will stay there until the bank processes it off.

The pre-auths I see are usually for $1.00.

Fortunately, I only fill up once a month.

I use my BoA debit card for about 50% of my purchases and other than rental cars and hotel rooms, I don't think I've ever seen any kind of hold activity. I check my BoA online pretty much every day.

Curious if there is a certain type of transaction that often involves money holds.

it is possible for gas stations and i have heard of restaurants doing it, before they know the tip amount, they estimate a more generous than average tip for the hold, to be sure it will go thru okay

i've heard that you can estimate a "hold" from the gas station of $50 or $75 and a "hold" from a restaurant at around a 25 percent additional charge

as i say it has only caused me grief w. hotels and i'm more careful now to have a separate credit card for them, car rentals too but i rarely rent cars

Yeah, when I started traveling for work I just got an AmEx through my employer and charge 90% of my purchases on that. Since I about 270 days a year on the road, that accounts for a lot of my spending.

I do use my BoA debit card for purchases at home though, and have never had a gas station or restaurant put a hold on my card that I'm aware of (and I do check it online almost daily). If a place of business did that to me, I'd not only not go there anymore, I'd make sure the business knew why I wouldn't be back.

The only problem I ever ran into with a restaurant was an (understandable) mistake by a waitress on a multi-card bill split. They refunded my money but it took about three days for the charge to drop off my card and for those funds to be available again.

I have BofA and I have never noticed any kind of hold for any purchases.

That's how I would get around it.

Of course, for hotel rooms, rental cars and gasoline, I simply use my credit card which I typically pay off that month to avoid finance charges.

Just wondering...

He recommends fighting the big banks by taking your business to your local CU. He may have links at his site for more information:

http://www.gregpalast.com

I have a CU acct that I don't even use. I was thinking of switching to Commerce for the free checking, but I suppose they'll nail me eventually, right?

and he would never rip anyone off. He's a very honest man:)

only because of The Beverly Hillbilles banked there!!! And this lovely lady worked there ....

I see I'm seconding the above suggestion. The fees are still there in small amounts; but nothing like the ones in the OP or regular banks.
Do check it out.

But the overdraft charges suck. I once went $200 in the hole for maybe $30 worth of purches because of fucking overdraft charges.

That's what this whole thing is about anyway. Collecting more fines, raking more millions.

I've been at a credit union since my first paycheck when I was 16. They have free checking too. And I know my credit union started allowing anyone to get on there a few years ago.

Mine does place a hold when I use my debit card at a gas station - but shit, it is only $1. If I can't handle that.... :rofl:

And in the last year, BofA has acquired, and more than doubled the interest rate on, three of my cards. (I'd cancel all three if cancelling cards didn't foul up your FICO score. Still, might be worth it.)

Haven't researched, but I assume there were some other significant changes in Corporate governance in 2006. Anyone who would bring Di Rita on board is suspect in my book.

:mad:

But don't hold your breath waiting for it. Capitalism rules!

I use an ATM card which is not a debit card to get cash. Had to be ugly to get the ATM card as opposed to the fee generating debit card that my greedy bank preferred me to carry.

I also use a credit card - and pay off charges each month. Credit card purchases carry greater customer protections than debit card transactions.

I never use mine as a debit card.

as a debit card. It isn't a question of HOW I chose to use it.

And reputable businesses won't put exorbitant holds on your account either.

Try an experiment: use your card, then call customer service. If they are unable or unwilling to tell you what the hold is, cancel your account and go somewhere else. If the merchant puts a $50 hold on for a $5 item, don't shop there anymore.

The problem is that you the consumer aren't told what the amount of the hold is ahead of time and in the case of some businesses like gas stations the hold may not be released for several days. For those who are living paycheck to paycheck it doesn't take long to have no available cash even though there is a positive balance in the account. It used to be that most banks wouldn't bounce transactions because of pending holds and the new BofA language suggests that now that is exactly what they'll do.

http://articles.moneycentral.msn.com/Banking/BetterBanking/HosedAtTheGasPumpByYourDebitCard.aspx