Tuesday, February 2, 2010

Convenient. Flexible. And, oh yeah, a total rip-off.

Posted By on Tue, Feb 2, 2010 at 12:04 PM

We warned you. And by now, you may have received the first sign of the banking industry's compulsion to treat you like you're: a.) stupid; b.) disposable; c.) stupid and disposable. 

Now look, we like the tellers at the local Chase branches. They're friendly, helpful, everything you could want when you're making a deposit or explaining that you accidentally left your card in the ATM again. In fact, some of us like them so much, we can't be swayed to change, no matter how much Huffington Post tells us we should.

But when the aforementioned sign arrived in our inbox under the subject, "A Change is Coming to Your Checking Account," we couldn't help but see red – as in, "in the red": 

Chase Debit Card Overdraft CoverageSM is a convenient feature that may give you a lot of flexibility in how you use your debit card. Soon, we can no longer provide it automatically.

Sounds scary, doesn't it? Oh, no! We're going to lose convenience? Flexibility? Gosh, what can we doooooooooo? Help us, Chase! 

Except, the fancy "overdraft coverage" terminology is just bank-speak for overdraft fees – something the banks have been ramping up in roughly the same proportion they've been lapping up taxpayer funds.

Fine print (bolding ours):

• Beginning 8/15/10, we will not authorize and pay overdrafts for everyday debit card transactions without your approval.
• An insufficient funds fee of up to $35 each time may be imposed for covering overdrafts that result in a negative end of day balance. Overdrafts may be created by check, in-person withdrawal, debit card transaction or other electronic means. Effective 3/29/10 this fee will change to a maximum of $34.
• Each time your account is overdrawn for 5 or more consecutive business days, we will charge you up to an additional $15.

• Once an overdraft has occurred, you are obligated to bring your account to a positive balance promptly.
• Whether your overdraft will be paid is at Chase's discretion, and we reserve the right not to pay. For example, we typically do not pay overdrafts if your account is not in good standing, or you are not making regular deposits, or you have had excessive overdrafts.
• Debit card purchases that are set up to bill automatically (like a gym membership) may continue to be authorized at our discretion even if you do not sign up for Chase Debit Card Overdraft Coverage.

Hmmm. As noted, that "convenient, flexible, overdraft coverage" sounds an awful lot like the grossly unjust "insufficient funds fees" that provide banks with up to half their revenue at the customers' expense. 

Suggestion: Don't opt in to the scam. Use cash. It's just as convenient and flexible, you'll have a better sense of how much you're spending and you'll be helping the banks clean up their act – instead of just cleaning up.

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Jennifer Savage

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