BBVA Compass is the latest bank to catch the ire of customers and attorneys because of overdraft fees.
In a lawsuit filed earlier this week, Houston-based restaurant company Fat Butter accused the bank of deceptive trade practices, claiming the bank posted debits out of the order they were made so it could increase overdraft fees.
For example, the lawsuit claims the bank pushed the largest debit through its account first, creating an overdraft, and then posted other smaller debits so a fee could be assessed for each transaction.
“It is spelled out in the lawsuit that the procedures the bank is following are to the detriment of the account holder,” said Marian Rosen, an attorney for Fat Butter.
Fat Butter filed the lawsuit, which is seeking class action status, in federal court in Houston.
Ed Bilek, a spokesman for BBVA Compass, said the bank's processes comply with all applicable laws. Transactions are posted on the date received by the bank, he said, noting that the order they're received may differ from the order the consumer actually made the transactions.
“You really can't do things in a chronological fashion, the technology just isn't there,” Bilek said. “But if you always have more funds than the transactions initiated, you don't run into a problem of fees.”
BBVA Compass, the U.S. operating arm of the Spanish banking giant Banco Bilbao Vizcaya Argentaria, has 85 branches Houston, including 27 recently acquired Guaranty Bank branches.
In Fat Butter's case, the business, according to the lawsuit, was charged more than $2,000 in fees because the bank allegedly reordered transactions to increase the number of fees charged.
In its contract with consumers, the bank discloses it may pay or charge items to accounts in any order, the suit says, but adds that the bank really always rearranges transactions from highest to lowest. Always reordering transactions is “abusive,” the litigation claims.
Lawmakers and regulators in recent months have criticized banks for trying to bolster profits by amping up fees, including those for overdrafts. Banks call such overdraft programs a courtesy, while consumer advocates say the fees force consumers to pony up billions without much choice.
Most banks introduced overdraft programs in 2001, according to federal regulators. About a quarter of banks nationwide process overdraft transactions by size, from largest to smallest, which can increase the number of overdrafts because the account gets overdrawn more quickly, according to a study by the Federal Deposit Insurance Corp. issued in December.
Federal lawmakers are considering legislation that would require banks to get permission from customers to allow overdrafts.
Earlier this week, Bank of America and Chase announced overhauls to how they charge such fees.
Bank of America said that starting Oct. 19, it will no longer charge overdraft fees if an account is overdrawn by less than $10 for one day. The bank also said it would make it easier to opt out of overdraft protection and cap the number of times it charges overdraft fees at four times.
Chase said it would eliminate overdraft protection for debit cards unless a customer opts in, post debit card transactions and ATM withdrawals in the order they occur, eliminate the fees if an account is $5 or less overdrawn, and cap the number of overdraft fees per day at three.
In reference to "Federal lawmakers are considering legislation that would require banks to get permission from customers to allow overdrafts," you obviously are unacquainted with Reg E. Reg E required that ALL banks--not just Chase--acquire permission from account holders to overdraw their accounts. This is called Opting In or Opting Out. Chase is not the only bank to be instituting this. All banks have Opt In and Opt Out due to Reg E, which required all banks be compliant by August 14th, 2010.
ReplyDeleteMy point is: If you are going to write a blog about banking matters, you should be better informed about the laws regarding such issues. If you hate BBVA Compass, fine, but at least be well-informed enough to make sense in your blog.
They claim they are posting transactions in a chronological order. What they are posting is the expenses; not the deposits. For instance, you may start your day by making a deposit as your first stop in your day's errands. You then go on to make purchases throughout the day for your various needs thinking you have covered your expenditures with your early morning deposit. Not so. They will show your expenses in a "chronological" order on your statement, however, you will not get credit for that derposit until after that night's processing has occurred. I operate a small business. With the economy as it is today customers pay slow and there is less revenues than there used to be reducing my cash-flow. Money is tight. instead of the bank using its fiduciary responsibility by its state's charter it makes policies than do not give me a fair chance. It is though the odds are stacked against me as if I had gone to Vegas.
ReplyDeleteFurthermore, should you "overspend" your account as I described above making purchases of just a dollar or two per transaction (get a coffee or buy milk, etc.) they make no distinction of the purchase "overdraft" amount and still hit you with the full $38.00 charge. All the while they do so knowing that you have the funds on hand with them and that they simply have not "processed" the deposit. Adding insult to injury should you question them about charges or attempt to redress of the charges they tell you they are doing you a favor by approving the charge lest you bounce your transaction with the merchant all the while having the electronic capability to simply decline the transaction due to "lack of funds".
God forbid that you use another account to make the purchase if the first account is declined
I think BBVA is a terrible bank! Their overdraft fees are higher than any other well known bank and they will keep charging every ten days another large amount even if you are a senior who survives only on there Social Security monthly check. No mercy, no exceptions even if you have no way until the following month to add more money back into your account. If your old, sick or disabled they do not care. That's only one of the trouble I've had there. I plan to report them to the BBB. MM Austin, Tx
ReplyDeleteI think BBVA is a terrible bank! Their overdraft fees are higher than any other well known bank and they will keep charging every ten days another large amount even if you are a senior who survives only on there Social Security monthly check. No mercy, no exceptions even if you have no way until the following month to add more money back into your account. If your old, sick or disabled they do not care. That's only one of the trouble I've had there. I plan to report them to the BBB. MM Austin, Tx
ReplyDeleteI am a elderly senior citizen living only on my monthly social security check which is below poverty level. If I get the initial $38.00 overdraft fee which they love to make, then there is another $25.00 fee added every ten days with no mercy if you have no way to bring your balance up until your next direct deposit. That could leave me almost 1/7th short of my whole amount to live on the next month. It doesn't matter if your sick, require medications, old or disabled- they will leave you less able to even survive. That's only one problem I've had. I plan to report them to the BBB for other deceitful things that happened after I agreed to give them my e-mail address. Don't put your money in BBVA Compass Bank unless you want nothing but trouble.
ReplyDeleteI am a elderly senior citizen living only on my monthly social security check which is below poverty level. If I get the initial $38.00 overdraft fee which they love to make, then there is another $25.00 fee added every ten days with no mercy if you have no way to bring your balance up until your next direct deposit. That could leave me almost 1/7th short of my whole amount to live on the next month. It doesn't matter if your sick, require medications, old or disabled- they will leave you less able to even survive. That's only one problem I've had. I plan to report them to the BBB for other deceitful things that happened after I agreed to give them my e-mail address. Don't put your money in BBVA Compass Bank unless you want nothing but trouble.
ReplyDeleteI have had the displeasure of dealing with bbva mortgage department, I strongly advise against this, as it has been a total nightmare. It has been 2 months and we still have not closed. We have contacted supervisors, no help. I emailed the CEO 3 times, no response,no help. 2 months and we still do not have a close date. I guess they are to busy supporting the drug trade, to provide, service to their clients.
ReplyDelete