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Sometimes it seems like young people have a huge bull's eye on their backs for the banks. People who are between the ages of 18 and 24 are being killed with bank overdraft fees. The latest stats say they're paying more than one billion dollars in overdraft fees every year. Clark recently heard from someone who has a teen that overdrew a debit account by $15 and that generated $80 in fees. As a parent, it's getting more and more difficult to teach the young about money. But it must be done. When Clark was in school, you paid for things with cash. Today there's no equivalent in a credit-crazy world. While cash is finite, plastic is infinite. A parent's most important lesson to a son or daughter should involve a pen and a check register -- showing them how to take debit transactions seriously. Banks are only too happy to approve transactions that will result in overdrawn accounts and high fees.

There's a bill in Congress that's trying to make it so that a bank must contact you for approval before they overdraw your account. The banks, predictably, are incensed about this because they may lose profit. Clark loves it when people have more info to make smart (or dumb) choices. What happened to ethics and morality in the banking world? Why do bankers get up in the morning and try to figure out how to rip off fellow Americans? If a bank approves an overdrawn transaction that generates fees, how is that moral or ethical?? It's not. The bill will probably be killed because the bankers are so strong giving dirty money to politicians. So teach your children well and you'll save them from losing money in the school of hard knocks.

What others are saying

WACHOVIA is just as dirty!
Yes, indeedy, the big banks (WACHOVIA) are out to rape and pillage! My daughter (age 17) was just slammed with $189 in OD fees for the same reason that other responders here were. The difference in my case is that I caught the mess at the $66 point, Called the bank (WACHOVIA), asked how much I needed to transfer to her account to stop the bleeding, was told that $50 would cover it. I transferred the $50 to her account before even getting off the phone with the bank (WACHOVIA) rep ~ he assured me that would be the end of it. Well, let me tell you, that was NOT the end! The bank (WACHOVIA) rather craftily applied pending debits to the account BEFORE crediting my transfer incurring another $120+ in fees. I was shocked, furious. Called the bank again, was stonewalled...sorry, there's "nothing we can do". Visited my local branch (WACHOVIA). Got a "courtesy" $35 refund, but no one would address the fact that I had followed the first bank rep's instructions to the letter and still gotten screwed. And this after I have been a customer of WACHOVIA for fifteen years. Betcha the whole thing would not have happened if I had tens of thousands of dollars in my account. Those of us who earn average incomes are so lost in this economy... You're right, Clark. Ethics, morality are dead ideals in today's business world. Shame on them all!
By Val @ 09/19/08 01:41:00 PMreport abuse
BofA
I will be closing all my BofA accounts because I cannot afford my "free checking" any longer! I am in the same boat as the two other BofA customers below with an 18 year old son. When I call to ask why he's allowed to withdraw money when there is none in his account I'm told it's a courtesy. I requested they stop doing my any more "favors" but they say they cannot do this. They finagle the times of deposits and charges to maximize their fees. In the past week I have been hit with four overdraft fees for a total of $140. I'm so done with them and will look into a pre-paid visa for my son to use at college.
By Marie @ 09/01/08 04:22:31 PMreport abuse
WaMu Overdraft Protection or is it?
After my account was overdrawn by $1600 with over 27 transactions in a 2 week period, I questioned myself, how the he** does this happen? Frustrated, I wanted answers. I called WaMu and asked them about their overdraft protection plans. They have three kinds. One is given to the customer after banking with them for a period of time, as a thank you for being our customer. It covers between $100-1000 and requires no contract. The second is a line of credit at the cost of $36/year and customer accrues no overdraft fees. The third, is a transaction service that pulls funds out of your savings acount to cover insuficient funds, at a fee of $10/ transaction. I then asked her what would happen if I did not have any overdraft protection on my account? She said, your check would bounce and you would have to pay overdraft fee + whatever fees are associated with the purchase, and debit transactions would decline the charge and they would not go through. So this leaves me picking my brain, how exactly is this protection? I know I am not the only one who has experienced this. Choosing what bank to do business with is a pain, and just not banking with them is one course of action. But in reality, if this type criminal(usery laws) activity continues within one establishment, the the rest will follow suit. Take it to the next level, file complaints with your congressmen, better business bureau, even write the newspapers. You as a citizen have an obligation to yourself and your fellow citizens to be treated fairly and not allow the big wigs of corporate America control your livelyhood once it is earned. Just as James Otis collaborated with the sentiments of Baron Montesqeue, those who everyday barter the liberty of others, soon care little for their own. These bankers care nothing for their liberty, so why should we assume they care for ours. They count on our complacency, and that is how they have the power!
By amber @ 07/10/08 11:23:05 AMreport abuse
Overdraft Fees
Recently I discovered that BOA has begin hitting anyone in pending status overdraft fees when there is the potentially to be over drawn. This is a sign that the banking industry has taken a spiral down hill. It wasn't until recently that I was in this position. BOA used to not do that and if you made your cash deposit before the pending transactions posted you wouldn't be charged. Well those days are over and the public is now again a victim. Yes, your right, we should only spend what you have available - well they know how to post and unpost your debits and catch you close to your balance margin. Besides the way they posted / credit your account is not easy to follow. I recently printed my statement three days in a row and would you believe transactions were showing up and disappearing. It looked like they would post them one day and if a deposit came in over night, they would back them out and post the deposit and move forward. Well to my suprise, I was hit with several charges that way. I am truly frustated with our banking industry!
By Frustated @ 05/27/08 10:21:16 AMreport abuse
Bank of America - Overdraft fees
This article reflects my daughter's week, who is a student in another state. She deposited a $70+ check from her employer, not realizing it was 1-2 weeks over 6 months old. (Must have been held at the Corporate office and mailed late; she deposited immediately upon receipt) Over a week later, she received notice that the check was returned and she was charged $80 in fees. She had already deposited her regular paycheck, which was subject to the usual hold by the bank :o/ She spoke to someone, who waived one of the fees only. Additional transactions between the date of the notice and the paycheck clearing incurred another $90 in fees. $170 in fees for a $70 check error? I've suggested she speak to her employer to get the $70 check re-issued, and to provide them documentation of the resultant fees in an attempt to recover at least part of it from them, but that would be iffy at best.
Obviously, she has learned that checks over 6 months old cannot be deposited, but, what recourse is there for her? WHY IN THE WORLD DOES BANK OF AMERICA ALLOW DEBIT TRANSACTIONS WHILE AN ACCOUNT IS IN DEFAULT?!?! Shouldn't the card be refused? Clearly this benefits the banking industry, especially with young people who do not have extra $$ to pad their accounts. It's disgusting!
By Denise @ 04/15/08 06:03:30 PMreport abuse

WACHOVIA is just as dirty!

Yes, indeedy, the big banks (WACHOVIA) are out to rape and pillage! My daughter (age 17) was just slammed with $189 in OD fees for the same reason that other responders here were. The difference in my case is that I caught the mess at the $66 point, Called the bank (WACHOVIA), asked how much I needed to transfer to her account to stop the bleeding, was told that $50 would cover it. I transferred the $50 to her account before even getting off the phone with the bank (WACHOVIA) rep ~ he assured me that would be the end of it. Well, let me tell you, that was NOT the end! The bank (WACHOVIA) rather craftily applied pending debits to the account BEFORE crediting my transfer incurring another $120+ in fees. I was shocked, furious. Called the bank again, was stonewalled...sorry, there's "nothing we can do". Visited my local branch (WACHOVIA). Got a "courtesy" $35 refund, but no one would address the fact that I had followed the first bank rep's instructions to the letter and still gotten screwed. And this after I have been a customer of WACHOVIA for fifteen years. Betcha the whole thing would not have happened if I had tens of thousands of dollars in my account. Those of us who earn average incomes are so lost in this economy... You're right, Clark. Ethics, morality are dead ideals in today's business world. Shame on them all!

By Val @ 09/19/08 01:41:00 PMreport abuse

BofA

I will be closing all my BofA accounts because I cannot afford my "free checking" any longer! I am in the same boat as the two other BofA customers below with an 18 year old son. When I call to ask why he's allowed to withdraw money when there is none in his account I'm told it's a courtesy. I requested they stop doing my any more "favors" but they say they cannot do this. They finagle the times of deposits and charges to maximize their fees. In the past week I have been hit with four overdraft fees for a total of $140. I'm so done with them and will look into a pre-paid visa for my son to use at college.

By Marie @ 09/01/08 04:22:31 PMreport abuse

WaMu Overdraft Protection or is it?

After my account was overdrawn by $1600 with over 27 transactions in a 2 week period, I questioned myself, how the he** does this happen? Frustrated, I wanted answers. I called WaMu and asked them about their overdraft protection plans. They have three kinds. One is given to the customer after banking with them for a period of time, as a thank you for being our customer. It covers between $100-1000 and requires no contract. The second is a line of credit at the cost of $36/year and customer accrues no overdraft fees. The third, is a transaction service that pulls funds out of your savings acount to cover insuficient funds, at a fee of $10/ transaction. I then asked her what would happen if I did not have any overdraft protection on my account? She said, your check would bounce and you would have to pay overdraft fee + whatever fees are associated with the purchase, and debit transactions would decline the charge and they would not go through. So this leaves me picking my brain, how exactly is this protection? I know I am not the only one who has experienced this. Choosing what bank to do business with is a pain, and just not banking with them is one course of action. But in reality, if this type criminal(usery laws) activity continues within one establishment, the the rest will follow suit. Take it to the next level, file complaints with your congressmen, better business bureau, even write the newspapers. You as a citizen have an obligation to yourself and your fellow citizens to be treated fairly and not allow the big wigs of corporate America control your livelyhood once it is earned. Just as James Otis collaborated with the sentiments of Baron Montesqeue, those who everyday barter the liberty of others, soon care little for their own. These bankers care nothing for their liberty, so why should we assume they care for ours. They count on our complacency, and that is how they have the power!

By amber @ 07/10/08 11:23:05 AMreport abuse

Overdraft Fees

Recently I discovered that BOA has begin hitting anyone in pending status overdraft fees when there is the potentially to be over drawn. This is a sign that the banking industry has taken a spiral down hill. It wasn't until recently that I was in this position. BOA used to not do that and if you made your cash deposit before the pending transactions posted you wouldn't be charged. Well those days are over and the public is now again a victim. Yes, your right, we should only spend what you have available - well they know how to post and unpost your debits and catch you close to your balance margin. Besides the way they posted / credit your account is not easy to follow. I recently printed my statement three days in a row and would you believe transactions were showing up and disappearing. It looked like they would post them one day and if a deposit came in over night, they would back them out and post the deposit and move forward. Well to my suprise, I was hit with several charges that way. I am truly frustated with our banking industry!

By Frustated @ 05/27/08 10:21:16 AMreport abuse

Bank of America - Overdraft fees

This article reflects my daughter's week, who is a student in another state. She deposited a $70+ check from her employer, not realizing it was 1-2 weeks over 6 months old. (Must have been held at the Corporate office and mailed late; she deposited immediately upon receipt) Over a week later, she received notice that the check was returned and she was charged $80 in fees. She had already deposited her regular paycheck, which was subject to the usual hold by the bank :o/ She spoke to someone, who waived one of the fees only. Additional transactions between the date of the notice and the paycheck clearing incurred another $90 in fees. $170 in fees for a $70 check error? I've suggested she speak to her employer to get the $70 check re-issued, and to provide them documentation of the resultant fees in an attempt to recover at least part of it from them, but that would be iffy at best.
Obviously, she has learned that checks over 6 months old cannot be deposited, but, what recourse is there for her? WHY IN THE WORLD DOES BANK OF AMERICA ALLOW DEBIT TRANSACTIONS WHILE AN ACCOUNT IS IN DEFAULT?!?! Shouldn't the card be refused? Clearly this benefits the banking industry, especially with young people who do not have extra $$ to pad their accounts. It's disgusting!

By Denise @ 04/15/08 06:03:30 PMreport abuse

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Oct 05, 2007 -- Bank overdraft fees plaguing young adults

What others are saying