Ways Banks rip you off

[bugeyed]

Well, I found this on another forum. I think as an experiment, next time I fill up for gas, I am going to the nearest ATM machine to check the balance of my account. If my money is not all there (minus what I paid for gas), I am closing my bank account and going to a credit union. There's a very good reason for this. That banks would do this show serious ethical issues with the bank itself, which itself could mean the bank is in financial difficulty. Do you really want to take a chance that the bank could fail with all your money in it? Of course the other reason can be simple greed, if they can cause you to bounce on your payments then they can sock you with overdraft charges. Either way, why reward these sharks with your business? Fuck them.

I think we are moving to the next stage of banking era, moving from the stage where banks have reneged on their traditional banking duties to a stage where banks become rip off artists and sharks; in line with historical precedents this latter stage usually marks a point in time just before a collapse.

Banks came about by providing 2 primary functions. 1) Keeping your money safe and 2) maintaining your financial privacy. Since they had done away with both these things, thus undermining their own institutional usefulness, they have resorted to these kind of tactics outlined below. Read and learn my friends.

Warning About Paying At
The Pump With Your Card
Or...Little-known ways the banks rip you off every day
Ted Twietmeyer
3-5-7

RIP-OFF #1

Everyone has done it. You stumble out of your car, make a bee-line for the card reader on the pump, swipe your card and the pump and start filling your tank. Why go inside and stand in line? This is far easier and it's all the same, right? I thought so too, until one day I found my bank balance was seriously shorter than it should be and explored the reason why.

Paying at the pump is NOT the same as paying inside. When you pay at the pump here's what happens. This fact is straight from a bank officer at my bank. Using your credit/debit card will authorize you to pump gas and the gas station company to invisibly debit your account for an amount that can be THREE TO FIVE TIMES what the pump displays! That's right - $20.00 of gasoline can result in an IMMEDIATE DEBIT from your account of up to $100.00.

Suppose you're driving on a long trip in a small to mid-size vehicle getting typical mileage and fill your tank twice the first day, by the time you reach your hotel or destination your bank account can be $200.00 less than when you got in your car that morning! And what if you drive a gas pig SUV that costs $40.00 to fill each time? Your bank account could plunge up to $400.00 without you being aware of it, before you even reach your hotel. If you're traveling on a tight budget, you could actually have your credit/debit card denied by the hotel when you check in. This too, was confirmed by the bank officer. Often when traveling by vehicle we think of the hotel as our single biggest daily expense. This isn't always the case.

The bank officer's remark about WHY this is done was, "They do that because they don't know how much gas you'll be buying." A lame excuse if I ever heard one. Any gas company could re-credit your account just as quickly as they debit it

It was time to test this fact prove it is indeed true. First, a look on-line to check my bank balance. Then a trip to the nearest gas station to fill the car. Immediately upon returning home I checked the bank balance again. Sure enough - a sum of 3 TIMES of what the pump display was gone from my account. And 3 1/2 days the missing money "re-appeared" in the bank. However, if you walk inside the gas station and pay there instead, my test revealed that only the exact amount is taken from the account. It's handled like any ordinary retail transaction.

Naturally, banks never tell account holders about this dirty deed - unless they ask about it or notice it. By now you're asking, "How long can they keep my money?" The answer I received upon asking the bank officer was THREE TO FIVE DAYS.

RIP-OFF #2

Now here's another aspect to this dirty deed few people realize. While your money has disappeared into this no-man's land - will you receive all the interest on it they made while it was stolen from you? Not likely.

RIP-OFF #3

There is also the absurd "5-7 day wait for deposited checks to clear." In this era of computers and instant credits and debits, does it REALLY take that long? Certainly not. But they use your money for several days in investment accounts, reap the interest and then give you nothing other than the actual deposit amount. But go try and write a check at any major store like China-mart and see what happens. The check reader attached to the cash register reads your account number, submits it to your bank through the network and immediately right there on the spot, takes the funds from your bank account. Checks are now the same as a debit card. One day in Wal-Mart a cashier called security because a woman had written a check which was rejected on-the-spot by the system. She was trying to buy a color television with it, and they took her away.

RIP-OFF #4

This one is right up there near the top of the nasty list of bank tricks. Like many people I pay my bills once a month. About 1AM I called the phone company to pay my phone bill. Quicker and more reliable than mailing it, right? It was shocking to discover that the transaction was DENIED by the phone company computer. Thinking I made an entry error, I tried a second time but to no avail. I then went on-line to check my bank balance and to my horror, found that all but about $20.00 was GONE from my account. That resulted in a sleepless night. Where did the money go? Was my account hacked? Did the bank make a serious error? What happened?

About 5AM, I crawled out of bed and to check on-line again. Presto- like a magic trick the missing funds re-appeared. But the bank had already hit my account with overdraw charges for EACH of the two attempts I made to pay my phone bill. Now I was boiling mad and couldn't wait until 9AM came.

If I was on the road and attempted to use that card at a gas station that night or at a hotel, it would have been denied.

A call to the bank resulted in numerous apologies by them for the stunt. Many readers already know what this is - it's called "sweeps." In the middle of the night many bank accounts are hit by this. Since the stock market is open on the other side of the planet, the bank's computers take the money from thousands of checking and other accounts and invest it in short-term investments overseas. Before the banks open, the money magically re-appears in all the accounts. Of course, the depositor never sees a penny in interest from this dirty trick either. You may have an "interest-bearing bank account" - but you'll never see the killing they make from your money overseas 5 days a week.
SWEEPS IMPLICATIONS

Now let's look at this system a bit closer: The entire sweeps system depends on EVERYTHING working flawlessly. Imagine for a moment that something goes wrong. Perhaps someone hacks the system (history shows that no system has ever been proven completely failsafe, and it is only as secure as those using it.)
What happens if the money ISN'T moved back into the accounts? Perhaps even your account? What then? A survey several years ago revealed that the average person has less than $20.00 of currency in their pocket in this age of plastic money. Imagine the calamity that would occur across the country, when every bank transaction is denied! Millions of people at stores, gas stations, restaurants, utility companies and more the next morning - all suddenly find the only money they have left is in their pocket. What then? Martial Law?

Think this can't ever happen in your country? Don't count on it. It just might be the way the economy will be destroyed overnight - all electronically. And those that do this dirty deed will remain invisible - hidden behind keyboards at a "secret location."

[bzbatl]

I have two cards I use for gas, my Bank of America debit card and my USAA rewards credit card.

Both will show a "hold" for $60 when I swipe at the pump. Both do not deny me even if my checking balance is less than $60.

I dunno what shitty bank this guy uses, but it doesn't seem to concern my account at one of the worst rated national banks.


Another rip-off is automatic transfers. I called BOA to find out why I was charged $10 to transfer money from my savings into my checking when an automatic payment was going out the same night my paycheck is direct deposited.

The answer was "the order that the actions cleared on the account." So in other words, the computer determined that it could charge me if it debited the payment before it posted the credit (which occurs at the same time overnight).

Beyond that, does it really cost $10 for a computer to transfer money from my savings to my checking account?

After some bitching at them, they credited me the $10 back and I took the payment off auto-pay.

[Antimatter]

Originally Posted by bugeyed

RIP-OFF #1

Everyone has done it. You stumble out of your car(blah, blah, blah)...

Actually, this isn't the banks. It's the difference in the networking abilities of the various gasoline companies. When you make a charge at the pump, the gas company (or whoever owns the pump) sends a signal to your bank that you're making this transaction, and they put a temporary charge in your account reflecting this for a standard amount. When the the pump finally gets the actual charge amount to the bank, the temporary charge is reversed and the correct amount goes in. What's happening here is the gas station is protecting itself by asking the bank, "Does this card-holder have any cash in their account? I'll just send through a 'ping' for $50 to see." So it's really the gas station, not the bank that's causing the problem.

Secondly, if you're running with so little cash in your account that this sort of transaction can overdraft you, DON'T USE YOUR CHECK CARD AT THE PUMP!!! Pay cash. You'll have to stand in line, but that's the price you pay for not having the savings.

Originally Posted by bugeyed

RIP-OFF #2

Now here's another aspect to this dirty deed few people realize. While your money has disappeared into this no-man's land - will you receive all the interest on it they made while it was stolen from you? Not likely.

RIP-OFF #3

There is also the absurd "5-7 day wait for deposited checks to clear." In this era of computers and instant credits and debits, does it REALLY take that long? Certainly not. But they use your money for several days in investment accounts, reap the interest and then give you nothing other than the actual deposit amount. But go try and write a check at any major store like China-mart and see what happens. The check reader attached to the cash register reads your account number, submits it to your bank through the network and immediately right there on the spot, takes the funds from your bank account. Checks are now the same as a debit card. One day in Wal-Mart a cashier called security because a woman had written a check which was rejected on-the-spot by the system. She was trying to buy a color television with it, and they took her away.

This is the oldest trick in the book, and all financial institutions do this including your credit union. Banks, brokerage houses and credit unions make money on the 'float', the time between when you make a transaction and the check clearing system completes the payment. Blaming the 'evil' bank and expecting other financial institutions to do things differently is hogwash.

Originally Posted by bugeyed

RIP-OFF #4
This one is right up there near the top of the nasty list of bank tricks. Like many people I pay my bills once a month. About 1AM I called the phone company to pay my phone bill (blah, blah)

A call to the bank resulted in numerous apologies by them for the stunt. Many readers already know what this is - it's called "sweeps." In the middle of the night many bank accounts are hit by this. Since the stock market is open on the other side of the planet, the bank's computers take the money from thousands of checking and other accounts and invest it in short-term investments overseas. (yak, yak)

Here come the black helicopters. I need to put on my tinfoil hat.

Point 1) Who pays their bills by phone? Mostly people who are late or delinquent with their bills. I've done it when I've had to, but I don't like to do it because there's usually a charge associated with 'payment by phone'. This person's description suggests to me that they're someone who's habitually late on their bills, bad at saving up money, and probably someone who likes to blame others (like the 'evil' banks) for their own lack of discipline. I know that's not you, Bugeyed, you're just quoting from another list. So I'm not hacking on you, just on whoever originally wrote this stuff.

Point 2) 'Sweeps'. The term 'sweep' is used to describe when money moves from one type of holding to another. Most commonly, when you purchase money market shares at your brokerage or bank, the money is 'swept' from cash to money market shares, or vice-versa. It does not stand for some super-secret transaction regarding currency hedges through the illuminati in Switzerland or Japan. Most smaller local or regional banks have direct access to foreign currency markets, they usually contract through a larger clearing firm to do those sorts of transactions. So it would take a few days, at least, to take the unreconciled cash from a bank and invest it overseas. And, what if the investment moved the wrong way in the meantime? Would the bank charge you negative interest? If they did the OCC (Office of the Comptroller of Currency - the SEC for banks) would come down on them like a ton of bricks-people at the bank would end up in orange jumpsuits.

All of this sounds like someone who overdrafted their account and is looking for someone else to blame.

[bzbatl]

Or someone who's pissed off that banks make tons of money off other people's money while delivering the level of service worse than what you'd expect at McDonald's.

And I'm not talking about profits along the lines of oil companies. I mean their operating income could be cut WAY down and make an enormous profit. How else do you explain the hundreds of bank branches that are open (and dozens are the same bank) in a 5 mile radius?

There ARE banks out there that pay you pretty well for your money sitting around. Take a look at ING Direct or the other handful of 4-5% interest savings accounts. But those accounts are pretty limited in access.

Another rant subject would be why credit reporting agencies get to make money off information that you never gave them permission to sell. And when it's false information it takes an act of god to get it removed.

[psudy]

That is the dumbest thing I have ever read.
1) The gas station is charging you, not the bank. Use your debit card as a credit card and this won't happen.
2) Most checking accts pay minimal interest, and judging by this numbnuts comments, his $20 overcharge by the GAS STATION would result in about 1/2 cent. in interest.
3)The bank has to wait on the money as well. If the jackass had matching funds in his account, they wouldn't put a hold on the check. Banks do this to protect themselves from shady checks, that shady people try to cash. If they couldn't do this and had to eat the losses, who do you think would actually pay? you would in the form of higher fees, and loan rates.
4) That is just flat out false. Do you really think that after the bank closes your money disappears in the middle of the night? Give me a fucking break.

If you believe this crap, I suggest you put your money in your mattress and give me your address.

[bassholic]

This is interesting. I am 24 and know that this information is 'bogus'. And when i say bogus not that it doenst happen, but for the reasons the person went off about. Oh well for the time being i have my money and i am happy.

Should i complain about the bars now. I start a tab and leave the bar. I have a charge for say 13 and then a second charge for 13. It takes approx 4 days for everything to straighten itself out. The BAR is watching there back b/c business does not end until 1am and thats when the real processing happens. I am not complaining

[cfrias99]

Dude, cancel your accounts and write money orders. Chances are you are not going to make shit on that stupid hold for 60 dollars. Bitch and moan all u want, the banks have to make money somehow. This is no different than taking your money and paying 2% interest on it and lending it to me and charging me 7% on it.

[bugeyed]

Originally Posted by Antimatter

Actually, this isn't the banks. It's the difference in the networking abilities of the various gasoline companies. When you make a charge at the pump, the gas company (or whoever owns the pump) sends a signal to your bank that you're making this transaction, and they put a temporary charge in your account reflecting this for a standard amount. When the the pump finally gets the actual charge amount to the bank, the temporary charge is reversed and the correct amount goes in. What's happening here is the gas station is protecting itself by asking the bank, "Does this card-holder have any cash in their account? I'll just send through a 'ping' for $50 to see." So it's really the gas station, not the bank that's causing the problem.

Why would it take three whole days for you to be credited back the money in excess of the actual amount of the gas purchase? Is the gas station holding all that money all that time? Does it really take three days to figure out how much you paid for the gas? Who is drawing interest on your money interim until you get it back?

Originally Posted by Antimatter

Secondly, if you're running with so little cash in your account that this sort of transaction can overdraft you, DON'T USE YOUR CHECK CARD AT THE PUMP!!! Pay cash. You'll have to stand in line, but that's the price you pay for not having the savings.

This I agree with. However it begs the question of why your money is being held, and several times the amount you paid at that, even when the transaction has long been completed. It's still a ripoff.

[bugeyed]

Originally Posted by cfrias99

Bitch and moan all u want, the banks have to make money somehow. This is no different than taking your money and paying 2% interest on it and lending it to me and charging me 7% on it.

No they don't, because they create money out of thin air. Banks create money out of thin air, loan it out, then demand it back with interest. This is why the economy goes through boom and bust cycles. It's a huge scam.

[bugeyed]

Originally Posted by Antimatter

Point 2) 'Sweeps'. The term 'sweep' is used to describe when money moves from one type of holding to another. Most commonly, when you purchase money market shares at your brokerage or bank, the money is 'swept' from cash to money market shares, or vice-versa. It does not stand for some super-secret transaction regarding currency hedges through the illuminati in Switzerland or Japan. Most smaller local or regional banks have direct access to foreign currency markets, they usually contract through a larger clearing firm to do those sorts of transactions. So it would take a few days, at least, to take the unreconciled cash from a bank and invest it overseas. And, what if the investment moved the wrong way in the meantime? Would the bank charge you negative interest? If they did the OCC (Office of the Comptroller of Currency - the SEC for banks) would come down on them like a ton of bricks-people at the bank would end up in orange jumpsuits.

All of this sounds like someone who overdrafted their account and is looking for someone else to blame.

I am not completely familiar with the jargon, but I do know the money you have in the bank, IS being loaned out and invested by the bank. Your money is not actually there on hand with the bank. The bank takes your money, and puts it investments of its own choosing, without your permission and directive. Of course when you check your statement online or at the ATM you see that you have "money" in your account, but in reality it is not actually there. This is the essence of fractional reserve banking. For all you know your money could be wrapped up in subprime mortgage hedge fund that's ready to crash and burn.

Brokerage accounts work much the same way. You buy shares, and when you check your brokerage account, you see you have x amount of shares. Well not really. Your broker has probably sold them in a short sale. This is why brokerage accounts hate it when you collect your physical shares, they do everything they can to discourage it. If you retain your physical shares they can't short sell them. Banks are the same way. They hate it when you withdraw large amounts of cash, because it gives them less money to invest and fuck with without your permission. It lowers their cash reserves and subsequently their ability to loan out.

[OFFICER737]

Bank antics gets even better! When I got my first debit card I had used it at the gorcery store, then I checked my balance on the way home and saw that twice the amount had been charged. I asked the bank WTH was going on and I quickly by the bank supervisor that the bank itself places a hold twice the amount against your account to guarantee the funds would be there when the transaction cleared and the extra would be credited right back once the original charge cleared. During that time you do not have access to your own money that they put a second levy against. A buddy of mine that worked for another bank that did not do this kind of thing informed to push credit or tell them to run it as a credit card instead of a debit card to avoid that crap. And he also agreed that it was the bank and not the company processing the card. It could be different now though. Most times I just see a $1 charge on my account with the note "debit pending"

Now this a major pissed off complaint that I have with the banks. How they process deposits and debits and apply them to your accounts. I manage my account(s) VERY closely and can tell you exactly how much is in there at any given time....until the 2 am updates! Say you have $100 in your account and you use your card for $20, should still have $80 then, you deposit your pay roll check and it is before 2 pm so your money is "supposed" to be credited to your account right then and you check the balance and sure enough it shows there, then you stop off an pay your electric bill of $185 by check or card. Cool so far no snags. Then you get up the next morning and check your balance and you seel you have been hit by two $30 dollar or more NSF fees! WTF?? When you check your statement online you see that the $180 was sent thru before the deposit and since you only had $100 in there to begin with the hit you for the NSF but they "cover" the check and leave you -$210 and then the $20 card purchase that they have ALREADY AUTHORIZED and supposed to have deducted is the next transaction, already -$210 but they "cover" that charge so not it is -$230 and they hit you with yet another NSF fee and now you are setting at -$260 and THEN they apply the deposit!! WTF??

This happened to me before in a similar scenario and when I called the bank they said that they take the transactions as they are made and that they apply all deposits and then the debits when they reconcil the accounts during the 2am updates. I promptly told them they were lying sacks of shit and presented them with the receipts showing the time and date stamps proving the order the transaction hit their bank. They pretty much told me I was lying and it is was my fault the account got hit with the 2 NSF fees! I never did get the NSF fees back for that.

A couple of months later Ankle bought groceries at Kroger and when she swiped my card.....DENIED! I thought WTH? I just had $1600 deposited in there thru direct deposit. I checked the account and the money was there. After calling the bank branches 10-15 times and getting nothing but voice recordings I finally got a hold of branch rep. they said an account rep. from another bank had put a freeze on my account and they got a rep on the phone from that bank. They said they put a freeze on my account because they could not confirm my home telephone and tried contacted my place of work (the friggin police dept.) and thought the only way they could get my attention was to freeze my account! They were damn right, they got my attention!! I said I would be there in just a second, I hopped on my bike and went straight to the bank fuming pissed!! When I went thru the front door the rep I talked to was also the same one I opened the account with 4 years earlier and she caught me at the door asking me to calm down. Went to the rep's office who had forzen my account and what to know why she did that? She said since she could not confirm my home phone number she froze it (the phone number had been the same since I opened the account) and she said she several messages at my job. While standing there I called the police dept. who records all the phone calls and had them pull the tapes and check...the lying bitch NEVER called any of my numbers!! She started back tracking real fast and said since she could not confirm the home number she was closing the account. I told her to call the number listed...after a few mins. arguing she finally did and when my cell phone rang I threw it on the desk and asked "would you like to answer it or should I?" She said "OH". She promptly un-froze my account but informed me that they treat all declined card transaction with an NSF fee and that I would get hit the $31 fee and that's when I finally lost it!!

I still HAVE to bank with them but I only send transactions I have to thru them and use my USAA account for most stuff. A message to the banks from.....FUCK YOU ASSHOLES!