I have been banking with Wells Fargo for about a year. I've caught them doing some shady things and I'm wondering if its just common banking practices, or if they are uncommon in their trickery. For instance: #1 I had a very small amount of money in my checking account ($800 or so). I had written a check for $780 and I knew it would clear on a specific day. On that day, I checked my account online and found that it had not yet been received or processed. Knowing that WF doesn't process checks until midnight of the day that they were received, I made 5 or 6 ATM/Debit card transactions that day totaling about $75. All 5 (or 6) transactions immediately appeared online - which left my account balance at $725 BEFORE my $780 check cleared. I knew when I made the smaller ATM/Debit transactions that when the check for $780 came through that it would overdraft my account and I would have to pay an overdraft fee - which I accepted. The next day, I logged in to check my balance and I found that I had was charged 5 overdraft charges at $33 each. When I checked my online register, I noticed that WF had received my check, then moved it so that it would appear as the first transaction of the day, making all other transactions 'overdraft' transactions. Effectively rearranging my transaction history for that day to maximize overdraft fees. When I called customer service, they said that they "process transactions in the order that they are received." When I revealed that I knew that checks were processed LAST during the business day, she said: "we move your largest transaction to the beginning of the day so that your most important expenses are paid first" By this I think she meant rent checks or mortgage payments. After an uncomfortable silence, she said "sir, you are a valued customer, its our mistake, let me remove those overdraft fees for you." #2 I buy lunch each day from one of three small deli's/eateries in my office building. This week, I noticed that, when I balanced my account online, that the 'debit' amounts appear in my transaction history as inflated by between $1 and $2 per transaction. When I asked customer service about this, they said that when you use your visa debit card in a 'restaurant' they reserve an extra amount for a "tip". Which effectively takes money out of your account for at least 24 hours - even if a tip was included in the sum total of the transaction. Does anyone else see these things as manipulative and dishonest? They are pilfering my account at every turn, and manipulating my transactions to maximize fees and penalties. As well as charging me $2 every time I call to talk to someone about it.
1) Don't use debit cards. You run various risks, and pay to do it. The banks love them, especially when they collect fees from both you and the merchant, and using your own money, too. 2) Use credit cards. Let the merchant pay the bank. Pay in full every statement. 2) Find another bank (or credit union) than Wells. I've found their fees applied to their maximum advantage also.
I have found this to be common practice with the larger banks. A lot of people will just pay the overdraft fees and the bank makes a lot of money on them. I prefer small banks because they seem to have a little more common sense. These are the kind of questions that are good to ask when opening an account.
I agree. Smaller banks have practices that are not as liberal (and subsequently in some cases saves the account holder who likes to play on the edge some money in fees). I used to have accounts with both US Bank and Washington Mutual. It is VERY important to keep not only a balance, but safety net when dealing with these banks. For those who live without keeping an accurate balance your asking for trouble. These banks (and many others) LOVE to give their account holder some 'rope' when it comes to debit card transaction approval (and of course check approval). If many of the transactions are smaller ones, look out. These banks simply find no reason Not to approve when you buy a tank of gas, pack of smokes, groceries or generally any amount that is in the $1-100 range (often higher if you have been an account holder for a long time). they can stick you for $25-$50 a pop. Say you go out one weekend and you THINK you have enough money left, but in reality it's just a guesstimate. you use the card 6-8 times and everything gets approved and all is well...so you think. 5 days later you get a notice from the bank saying you owe them up to $400 in fees. IF your gonna use the debit card... keep a cushion that is untouchable. say $50-100 that always stays in the bank. Do not guess what your balance is. And DO NOT check your balance at the ATM and assume it's right. If you swim with the sharks, expect to get bitten now and then.
I agree. Smaller banks have practices that are not as liberal (and subsequently in some cases saves the account holder who likes to play on the edge some money in fees). I used to have accounts with both US Bank and Washington Mutual. It is VERY important to keep not only a balance, but safety net when dealing with these banks. For those who live without keeping an accurate balance your asking for trouble. These banks (and many others) LOVE to give their account holder some 'rope' when it comes to debit card transaction approval (and of course check approval). If many of the transactions are smaller ones, look out. These banks simply find no reason Not to approve when you buy a tank of gas, pack of smokes, groceries or generally any amount that is in the $1-100 range (often higher if you have been an account holder for a long time). they can stick you for $25-$50 a pop. Say you go out one weekend and you THINK you have enough money left, but in reality it's just a guesstimate. you use the card 6-8 times and everything gets approved and all is well...so you think. 5 days later you get a notice from the bank saying you owe them up to $400 in fees. IF your gonna use the debit card... keep a cushion that is untouchable. say $50-100 that always stays in the bank. Do not guess what your balance is. And DO NOT check your balance at the ATM and assume it's right. If you swim with the sharks, expect to get bitten now and then.
RE The restaurant tip issue. I am fairly certain that it is the respective merchant card servicer that each business uses that determines whether the CC used at the restaurant is pre-authorized for a tip. In "most" restaurants where tipping is expected the CC used is automatically authorized for 15%-20% greater than the actual amount of the check. This is to "ensure" that there are funds available on the debit/credit card to include a tip. I don't believe it is the CC issuer who has this policy, it depends on the Merchant Card services and whether or not the owner wants his/her CCs processed this way or not. Annoying, I know, but understandable for rest. biz owner as it most likely averts a lot of angry servers when they try to add their tip on at the end of the night and they are denied because there are not funds available. Just a little info, not too exciting.
Im a Wells Fargo Customer too (since 2001). I banked with a small bank my whole life and prefer the services(24hr phone help, more atms and branches, supermarket branches,etc) of the larger banks . But to each his own. Try calling 1-800-956-4442 next time you have a problem instead of the number on the back of your atm card. I don't think I have ever been charged for using this number. Or try getting help at your local branch. I'm 30 years old and have NEVER used a check book register or balanced a check book in my life. I have been charged overdraft fees less than 5 times in my life. My advice.... * Take the extra 2 minutes to call your bank and check your balance before you go shopping. If you have your cell phone with you, you could even call in your car or in the store or restaurant. * Don't push it. After one large extraction of funds from your checking account on a given day you should pretty much let that be it for that day. An exception would be when you call the bank a few minutes after making an atm/debit transaction and it has posted. * Always have an alternate form of payment when you go out. I'm a retailer and you wouldn't believe how many people I come across who don't have their checkbook and drivers license, or some form of payment card with them. * Save your cash, for places that only take cash. You will go to the atm a lot less. * There has been a few times when I have written a check to business or a person and it seems to take forever to post. In those cases I stop ALL activity on my checking account (atm, debit, check writing) until that check has cleared. I can always payoff any credit card usage I made during that time before the interest is charged. * Don't let your mouth write a check your body can't cash! (just kidding)
While on the subject of banks .... Wherever you open a checking account, whether it be a big bank or a credit union or a community bank, ALWAYS have an overdraft line of credit. If you do all your banking with one institution (such as mortgage, HELOC, etc.), they are more willing to waive such nuisance fees. My own financial institution linked HELOC to my checking account, so any accidental overdrafts always are added to my HELOC (in increments of $100 though) .... not that there were any overdrafts inthe first place. If you are careless and bounce too many checks, I heard that in certain states you can be PROSECUTED criminally for writing bad checks. Get an overdraft LOC -- prevents headaches like this, and potentially keeps you out of prison
Yes definately get the overdraft protection. I think that is another advantage of the big banks. I don't recall my small bank offering overdraft protection. At least not in the for of a credit card the way Wells Fargo does.
The practice of adding an additional amount to an authorization is common practice in restaurants, as someone noted. It isn't the bank, it's the merchant. They have to put through and authorization for the amount. They add on a "reasonable" amount for a tip. Be careful if you ever use your debit card for a hotel room or something like that. They can authorize (and put a "hold" on your account for) 25-50% more than the room costs, just so they're covered in case you have phone bills, room service, etc. And the hold may not be released for 5-7 days. When my husband and I first started dating, he took me to a fancy hotel for a weekend. Since he was only a few years out of BK, he didn't have a credit card. He used his debit card for everything. The following week, he started getting overdraft notices from his bank, along with a charge of $27 a pop. When he called the bank (because he knew he had money) they told him the hotel had not released the hold. He was actually charged twice during that time. The hold goes on and effectively removes the funds from your available balance, even though they are still on the books. Then the charge comes through and is taken from the account. If the hotel (or car rental, or whoever) doesn't explicitly remove the hold, it stays until it expires, up to 7 days. When you have a credit card, they don't charge you an overlimit in this case, and you can still use your credit card. This is one of the reasons that "fake" Visa and MasterCards are dangerous. I soon after made my husband (before we were married, or even engaged) an AU on my card so this never happened again.
The banks love to sell the wonders of debit or check cards, that if your card is used fraudulently, they will refund the amount, etc. Their ads say nothing of the consequences to other transactions going through your account. They love them because they get their merchant fees, and don't even need to give you free float.
In addition, a lot of people are much worse at tracking account changes resulting from debit cards than they are when they pay by check (and fill out their check registers) so increased debit card use is a great source of overdraft fees. Account holds are just another uncertainty in your account balance to generate more fees.
I banked with Wells for many years. One good thing or some might consider it a bad thing is when you use a debit card the money is placed on hold for forty-eight hours. If the merchant does not submit the charge to the issuing bank within that time the money is placed back into your account. People think they have more money then they do! This is with all banks. Not just Wells Fargo. Another thing is when you pump up for gas paying at the pump most gas stations only take a $1,00 authorization. Most people think they have more money in their account when they DON'T. A debit card is like a check. People need to carry a check ledger for their debit transactions. You thought you had a little more time on your check clearing so you made purchases you shouldn't have made. How is that Wells Fargo being sneaky? On the other hand, Wells Fargo is crazy with their fees and fines. And they are not very friendly about giving a courtesy refund whereas Bank of America is. I've made honest mistakes in my check book whereas Bank of America refunded me the fees they charged me from my mistakes. If there is something their Internet site or their automated telephone system cannot help you with they will waive their fees.
I have noticed the situation with #2 and I agree that it is annoying. Especially when some times the resturant takes several days to fully process their reciepts which keeps my bank account balance "off". Yes, the solution to this is to use a credit card instead of the debit card to pay for the food each time. Basically you could also just talk to the individual scanning your card to pay for the meal and ask them to only put the actual amount in before they swipe it. They take the card, swipe it, and then put in the amount for a certain figure over it, their choice. I worked at a hotel front desk, and we were told to add $10 a night to the room rate when "pre authorizing" or swiping the individual's credit card for a check in. This was to cover incidentals, taxes, and allow for a few phone calls to be charged to the room. Upon checking out, the correct amount would then be debited against the card. I suppose if one were to use their Visa Check Card for the payment it would then hold that pre authorized amount out of their account until it was fully processed. ChrisB
