Almost everyone knows the house always wins in Vegas, but there are a few cases where the house doesn’t win. In some cases, professional gamblers are able to make a very good living by taking the house to the cleaners month after month. I wish there was a way to win with banks, but there simply isn’t.
I sat at my desk today and ordered a piece of hardware with my debit card. I have a Chase checking account with email alerting turned on. For this account, I set a “low balance” alert so I get an email if my balance goes below $100. Their system is so good, if I have $101 in my account and order something for $1.05, the second the transaction is processed I have an email hitting my phone.
So back to today. The second I hit “submit” on the purchase page, I got an email from Chase saying “Your account is overdrawn”. I quickly logged into the Chase web portal and the transaction was marked as “Pending”, which means the charge was pre-authorized but had not yet posted to my account. Even so, my account was overdrawn and the overdraft fee had already been assessed. I transferred money from my savings to cover the overdraft, but my point here is this; I remember the early days of debit cards when you would get a “transaction declined” if you tried to spend more than you had. That was part of the brilliance of the digital economy.
The bank knows immediately if you have the money to cover the purchase and they authorize it. If you didn’t, they used to decline the transaction. Then, some asshole in some bank figured out two things; 1) certain people would rather pay an overdraft fee than be embarrassed at the supermarket or some restaurant, and 2) everyone else can go fuck themselves. The bank could stop the whole overdraft mess right there and decline the purchase, but they don’t. They’d rather charge you an overdraft fee, even if you have overdraft coverage. I looked into overdraft protection but it states right on the sign up page “Standard overdraft fees apply”… so why the fuck would I sign up and pay extra for something that, apparently, I already have in the form of Chase just covering the purchase, putting my account into a negative balance, and charging me the same fee they would anyway?
Now let’s talk about fraud
What really irks me is that this kind of bold face raping of the customer is everywhere in the financial industry… and there is no way to win. I sat there, angry at my desk, contemplating ways to try to fuck the banks and credit card companies over… but there just isn’t a way to do it. Not that I can see anyway. Some people think you can screw the credit card companies by running your balance up and claiming you lost your card… and I thought about doing that one day after my wallet was stolen. The credit card fraud specialist at the issuing bank sat there and told me the crooks were buying gas at some gas station as we spoke. When I told her to call the cops and get them over there and maybe pick up the security tapes if they miss the bandits, she actually couldn’t contain herself as she laughed in my ear. That made me so mad I wanted to bust into her bank and start yelling… but it’s indicative of the entire industry. To the banks, both customers and merchants are worthless and beneath common decency.
Fraud is expected and accepted
Not only do the banks not care about catching criminals who are willing to abuse their customers and the credit card system, they don’t care about the merchants these criminals are abusing either. When something like this happens, the banks simply take their money back from the merchant, and the criminal gets to screw everyone (except the banks) with their misdeeds. Just like I thought about doing, some people think going out and running up their credit cards then claiming it lost or stolen will somehow stick it to the banks, but it only sticks it to the merchants you spent the money with. Shit, even if you rob a bank, they have insurance to cover that kind of thing… the cost of which comes right back down on bank customers. The worst part is, even when banking practices are so horribly predatory and heavy handed that it crushes their customers, the economy as a whole, and even their own viability… they get bailed out by the very same people they were fucking over… their customers, the common tax payers. No wonder execs from Goldman Sachs started arming themselves with handguns (pdf).
Bankers start packin'
I’d be scared for my life too if I was an exec there and the general public started learning how the “upper crust” on this shitpie operates.
It works a little differently over here in Great Britain.
Banks have what’s called a pencil limit – usually up to £50 which exists on an account at any time. It covers you in case of “miscalculations” on your account whereby should you exceed your account / authorised overdraft limit it will cover you from £0 to £50. Most of the time, as long as you’re not repeatedly using your pencil limit, you won’t get charged.
If your pencil limit is £0 or you exceed it then you get charged and the banks start pleasing shareholders.
The only way to earn a pencil limit is to have your account in good order – don’t use cash withdrawals, don’t go overdrawn, don’t wipe out your balance the moment it goes in etc.
Of course, as an ex bank manager I got to know these things, certainly under British law none of this is to be made public knowledge, so keep it to yourself mate. 😉
Interesting. A pencil limit eh?
I can understand these limits and overdraft protection when it comes to writing checks (do you guys call it cheques?) because you can’t get immediate feedback as to account status when you write a check… but for electronic debit, I’m pretty sure banks could just decline the transaction. I can understand some people wanting to use something like overdraft protection, even for debit transactions, but I’d at least like to have the choice to put my account in strict “decline” mode if there aren’t enough funds. My local bank manager tells me that’s not even close to an option. That may be so, but its purely a policy issue (i.e. screw the customer), not a technical one.