BofA Misleading Balance Information Causes Overdraft Fees

[thecableguy]

What is the name of your state (only U.S. law)? Maine

I'm wondering if I have a valid claim here.

On 11/14 I made $2930 in deposits into my Bank of America Business Checking Account.
On 11/14 I also made $2665 in purchases using my Bank of America Debit Card
At the end of the day on 11/14 my Available balance showed as $267.
I was expecting 2 ACH debits to occur overnight totalling $265 ($200 + $65).
I expected to start the morning of 11/15 with approximately $2 available balance.
Instead, on 11/15 when I checked, both ACH transaction cleared, however the available balance showed $384.
What happened was that several of the debit card transactions from the day before, which has been previously authorized and deducted from my balance mysteriously disappeared.
Without knowing this, I assumed a different deposit had cleared, or perhaps expired authorizations have cleared, meaning that $384 is available to spend
On 11/15 I made further payments using my debit card totalling $313.
On 11/15 the available balance at the end of the day showed $71.

When I checked on 11/16, the Balance showed negative, -$180 with several overdraft fees. The $200 ACH transaction which had previously showed as processing, now showed NSF and was not paid.
I made no further transactions on 11/16.

On 11/17 The balance changed to -$394
Finally on 11/18 the balance changed to -$429

In total, I was assessed with 9 overdraft fees of $35 and 1 NSF fee of $35 totalling $350 in fees.

I contacted the bank via telephone on Wednesday 11/16, but was on hold for over 30 minutes and so I decided to call back the next day.
On 11/17 I called back and was on the phone for over an hour with a "banking specialist" who ultimately could do nothing except put blame on the Merchants. They said the merchant may not post the transaction on the same day as the authorization. I contended that the authorization deducts funds from my available balance, and those funds are set aside for the merchant so therefore it should not matter on which day the merchant takes funds from the account.

It's also worth noting that in the 2 years I've been with bank of america, similar situations have occurred at least 5 or 6 times where misleading available balance information leads to overdraft fees.

It's worth noting that I do not write checks, ever, In fact I don't even have any. I use debit card only and I have asked that my card be set to decline all transactions for which there are insufficient funds. BofA confirms that my card is set that way, which should prevent Overdraft from being possible with the debit card, yet I have still somehow incurred overdraft fees. In past occurrences, BofA has refunded those fees.

In this case, BofA refused to refund the fees and correct the situation.

I have several other accounts with other banks and debit cards and I have never had this issue with any other bank. They always display accurate Available Balance information.

In speaking with a BofA representative over the phone, they admitted that they do not keep a record of what is displayed to me as my available balance. The "Account Balance History" they have in no way matches what I observed in real time using their online banking or their mobile application.

I have read about several folks bringing a small claims case against Bank of America. In one case, it was over $58 in overdraft fees. The claim was brought for $2,058 to include wasted time, and punitive. It was reported that the plaintiff received a settlement in the full amount $2,058 the day before the court date. Other sources seem to indicate the BofA will prefer to settle than to send representatives to defend the case.

I am considering filing a claim. Is there any reason I should not seek the maximum amount of punitive damages? I think Maine small claims court limit is $5,000.

Any other advice or tips for getting this resolved is greatly appreciated! Thank You

 

[Zigner]

I would suggest that you start to keep an actual register of your transactions and not rely on the online information. Why? Because, as the bank said, sometimes merchants do strange things.

I would also suggest that you stop cutting things so close (down to $2) so that you can avoid similar situations.

 

[adjusterjack]

I have read about several folks bringing a small claims case against Bank of America. In one case, it was over $58 in overdraft fees. The claim was brought for $2,058 to include wasted time, and punitive. It was reported that the plaintiff received a settlement in the full amount $2,058 the day before the court date. Other sources seem to indicate the BofA will prefer to settle than to send representatives to defend the case.

I think you have been reading the pipe dreams of people on the internet. Nobody ever get punitive or wasted time awards in small claims court.

In many small claims venues a corporation is allowed to be represented by a key employee instead of a lawyer.

I think your problem is not with the bank, it's how you handle your money. You need a cushion in your bank account otherwise this is going to keep happening and it won't be the banks fault.

I'm not going to spend the time explaining how deposits work, you can read that in your accountholder's agreement, but you are just not getting it right.

Feel free to sue the bank for $5000 and see how far you get.

 

[thecableguy]

If i was writing checks, I would keep a register, but I don't use checks.

I only use my debit card, and when an authorization is made, it immediately deducts from my available balance.

I don't see that the merchant(s) did anything unusual here. If anything, it's BofA's crazy posting system which is at fault here.

I don't think it's unreasonable to expect that the Available Balance displayed in their mobile app and in online banking be accurate.

Even so, it's not like it overdrafted the $2 or that it was short by just a few dollars. The problem is that several transactions that I authorized on Monday disappeared from BofA on Tuesday, then reappeared on Wednesday. The merchant here (Paypal) authorized and posted everything on Monday. So the delays and discrepancies in available balance are the banks fault.

Again, never had this problem with any other bank. Seems many many people report problems with BofA specifically having crazy posting practices where daily, you can have funds re-appear in your account which aren't really there.

I plan on closing this account, but since it's negative right now they wont let me. I'm hoping for a settlement which can then just close the account and be done with BofA and their crap.

 

[Zigner]

If i was writing checks, I would keep a register, but I don't use checks.

I only use my debit card, and when an authorization is made, it immediately deducts from my available balance.

I don't see that the merchant(s) did anything unusual here. If anything, it's BofA's crazy posting system which is at fault here.

I don't think it's unreasonable to expect that the Available Balance displayed in their mobile app and in online banking be accurate.

Even so, it's not like it overdrafted the $2 or that it was short by just a few dollars. The problem is that several transactions that I authorized on Monday disappeared from BofA on Tuesday, then reappeared on Wednesday. The merchant here (Paypal) authorized and posted everything on Monday. So the delays and discrepancies in available balance are the banks fault.

Again, never had this problem with any other bank. Seems many many people report problems with BofA specifically having crazy posting practices where daily, you can have funds re-appear in your account which aren't really there.

I plan on closing this account, but since it's negative right now they wont let me. I'm hoping for a settlement which can then just close the account and be done with BofA and their crap.

The problem here is that you KNEW how much money you should have had and then let that knowledge fly out the window.

 

[thecableguy]

I think you have been reading the pipe dreams of people on the internet. Nobody ever get punitive or wasted time awards in small claims court.

In many small claims venues a corporation is allowed to be represented by a key employee instead of a lawyer.

I think your problem is not with the bank, it's how you handle your money. You need a cushion in your bank account otherwise this is going to keep happening and it won't be the banks fault.

I'm not going to spend the time explaining how deposits work, you can read that in your accountholder's agreement, but you are just not getting it right.

Feel free to sue the bank for $5000 and see how far you get.

Referencing this: https://consumerist.com/2008/01/21/suing-big-companies-in-small-claims-court-is-fun-and-easy/

As they said there too, the corp will prefer to settle then to fly a key employee out, and because it's small claims they can't send their lawyers.

Well unfortunately, I don't have the luxury of sitting on a cash cushion. I have very tight margins and a lot of debt, and no savings, so everything in goes right back out. It shouldn't be a problem because i do watch my balance regularly, and i dont use checks. I only use my debit card. If I tried using my debit card and there was insufficient funds, then the transaction would be declined at point of sale. So it shouldn't overdraft ever. I've also told them on numerous occasions that I want my debit card set so that it will decline all transactions with insufficient funds and they've told me numerous times that it is set that way and that an overdraft caused by debit card transactions should be impossible.

Unless of course, they give me a false available balance... in which case it IS possible.

It's also not an issue with the deposits those were both cleared and available before any transactions occured.

 

[thecableguy]

The problem here is that you KNEW how much money you should have had and then let that knowledge fly out the window.

Yep..I went to bed with $267 in there, and expecting 265 to come out over night expected to wake up with $2 remaining.

When I woke up, the 265 came out but there was $380 showing available because several authorizations that were placed on monday somehow disappeared overnight... It's nothing that the merchant did.

I had more bills to pay so I paid them out of the $380... why shouldn't I assume available balance means funds available to spend? It's not like I've written any checks that haven't cleared yet.

Without going back to the beginning of time, how do I know this isn't some old authorization that just expired from my account? If I'm trying to do business, I don't have time to reconcile my bank account between every transaction.

I think it should be reasonable to expect the bank to have tracked those authorizations correctly.

And here's the thing... If they had not showed me that $380 was available, I would not have made any of those further transactions... So again, it's like they were baiting me to overdraft my account.

 

[cbg]

After all, God forbid that you should keep track of your own balance and take responsibility for your own spending. Much, much better that it be someone else's fault if you don't want to take the bother of doing so.

 

[adjusterjack]

Look, I've read many complaints from people just like you. They invariably have overdraft problems because they operate on a shoestring and expect all their deposits to be available as soon as they put them in.

That just doesn't work and you have nobody to blame but yourself.

Pay more attention to what you are doing and keep more money in the account than you expect to use.

Gripe all you want but it's that simple and it isn't likely to change with a change of banks.

I've been with BofA for 40 years and have never had an overdraft fee. Why? Because I never ride my balance. There is always a cushion in the account.

 

[AdjunctFL]

If i was writing checks, I would keep a register, but I don't use checks.

I only use my debit card, and when an authorization is made, it immediately deducts from my available balance.

I'm at a loss as to why that means you can't keep a bank register. The ones I get from BofA say "Transaction Register", not "Check Register."

 

[thecableguy]

After all, God forbid that you should keep track of your own balance and take responsibility for your own spending. Much, much better that it be someone else's fault if you don't want to take the bother of doing so.

I did keep track of my balance. I check their online banking before making any transactions.

Their online available balance shown is what is misleading.

Their on-hold music marketing even says "Did you know you can get up to the minute balance information on our website or using our mobile app?"

Obviously if i was writing checks, I would need to keep track of that because they don't affect my balance until cashed, but since I don't use checks, and debit card transactions update the balance instantly, my online banking IS my register.

 

[thecableguy]

Look, I've read many complaints from people just like you. They invariably have overdraft problems because they operate on a shoestring and expect all their deposits to be available as soon as they put them in.

That just doesn't work and you have nobody to blame but yourself.

Pay more attention to what you are doing and keep more money in the account than you expect to use.

Gripe all you want but it's that simple and it isn't likely to change with a change of banks.

I've been with BofA for 40 years and have never had an overdraft fee. Why? Because I never ride my balance. There is always a cushion in the account.

Again, this wasn't caused by the availability of a deposit. It was caused because BofA accepted several authorizations, then removed them, only for them to re-appear 2 days later. Also not something caused by the merchant.

What's wrong with operating on a shoestring? If I have debt, it doesn't make sense to save or invest money because the interest on the debit will always be more than interest earned. So anything extra always goes towards debt.

I operate the same way with GoBank and Paypal and never have gotten an overdraft from them because they actually display accurate balance information in real time.

BofA's available balance is what lead me to make further payments. Effectively causing the overdrafts because they authorized too much against my balance. If I told them to decline transactions where there is insufficient funds, and they do not, it's it their fault?

Believe me, I can't wait until the debts are paid off, then I can have a cushion and savings, but that's not a luxury I have at the moment.

 

[thecableguy]

I'm at a loss as to why that means you can't keep a bank register. The ones I get from BofA say "Transaction Register", not "Check Register."

Sure... I could keep my own register, but why go through that extra effort when I've got real-time mobile access to my account balance information? Every other account I've had displays an accurate balance. Transactions over the available amount get declined at POS, no overdraft fee is incurred. I can just try a different debit card, or put it on my credit card. BofA however will accept credit card charges on a debit card even if you don't have sufficient funds, and they'll charge you an overdraft fee when you do it.

 

[TheGeekess]

You know that those debits against your account were outstanding, but you decided to spend the money twice. That's all on you. Pay what you owe BoA and stop trying to kite your account. It doesn't work anymore.

 

[thecableguy]

You know that those debits against your account were outstanding, but you decided to spend the money twice. That's all on you. Pay what you owe BoA and stop trying to kite your account. It doesn't work anymore.

Well no, actually I did not know that those debits were outstanding. From my perspective, they were removed from my available balance at the time they were made. I was lead to believe they had already been taken out of the balance.

Problem is I guess because several of the transactions were for identical amounts, it appears BofA has some kind of duplicate charges filtering system which caused all duplicate authorizations to be removed and so it added those funds back into my balance. But I wasn't aware of this until after the fact.

IE: I made these 10 transactions on monday, all via Paypal so they appear to come from the same merchant.

68
76.74
72.92
76.74
76.74
76.74
76.74
77.03
77.03
58.4

Those all showed they were deducted from my balance at the time of purchase, however overnight, only the following charges stuck:

68
76.74
72.92
77.03
58.4

The duplicates got filtered by BofA and the ~$384 in funds got added back into my account balance but they should not have. The Merchant (Paypal) did not cancel the authorizations they asked for. Each authorization had a unique number to it. If BofA had just simply kept all the authorizations from 11/14 into 11/15, my balances would have come out as expected, and I wouldn't have made any further purchases on 11/15, therefore, no overdrafting would have occurred.

So i guess in a root cause analysis, there was several contributing factors.

I don't get why everyone seems to be against me here?... Why can't anyone see that BofA's method of handling transactions is what caused the overdrafting to occur? If they handled authorizations in a better way, like how Paypal, or GoBank do it, then these overdrafts would not have occurred. The biggest complaint is that BofA's "up to the minute balance information" online and in their mobile app do not accurately reflect "the amount which you can spend on your debit card". Why is that such an unreasonable expectation of a bank? I would assume if I walked into a branch and asked the teller for my balance on the same day at the same time, they would have told me the same amount available.

Why does it need to be up to me to track my balance? Shouldn't the bank have the most accurate record anyway? I should be able to rely on the bank to provide me with accurate balance information. If they do not provide me with accurate information, then THEY are at fault for the cause of all these problems.

I still maintain I didn't do anything wrong. I made sure there were funds available to cover the transactions which I made. BofA's "magic charges" caused all this. I call them magic because they when I made the purchases the transactions appeared in my account, and funds were taken out... Then the next day the authorizations disappeared, and funds became available again. The next day the charges re-appeared and my balance was negative and showing overdraft fees. This disappearing act is the cause of the problem, and is what caused my available balance to display inaccurately, and to allow me to "spend the same money twice"...

This is probably why BofA has a 1 star rating on consumer reports. It's a setup, for people with tight budgets to get whacked with hundreds of dollars in overdrafts