NSF and Overdraft Protection

[PK]

A lot of us have made banking mistakes that have resulted in an NSF (non-sufficient fund) fee. Overdraft charges for some banks are now at a record high of $34. Kicking customers when they're obviously down. Of course banks need to have a penalty to help deter customers from writing checks their account can't cash. But what some people might not know is that the banks actually work against you. They don't have your best interest in mind.  They use a highest-to-lowest check processing system so they can accrue as many NSF fees as possible.

Example:
You have $100 in your account and three checks for $15, $35, and $75 arrive to your bank.
Your bank will process the $75 check first and then charge you NSF fees for both the $35 and $15 checks. (NSF fees = $68).
Instead of processing the $15 and $35 checks first and bouncing the $75 check resulting in only one NSF fee.

A lowest-to-highest system would be a great system for a bank to adopt because it would obviously mean they put the customer first. Something that I'm sure would attract a lot of customers.

What You Can Do:
Of course the best way to protect yourself is not to write bad checks. But accidents are known to happen. If you do receive an NSF fee from your bank there is a way to get your money back. Most banks and credit card companies will provide their customers a "one-time courtesy refund" for an NSF fee. They don't advertise or promote this courtesy (for obvious reasons) but you can ask for it. Some customer service reps might say that their "policy" is to only give refunds for "bank errors" but if you ask them very politely, and plead your case, there is a good chance they will connect you to a supervisor (or they will speak with their supervisor) and credit you back the NSF fee. (They might not say Yes the first time you ask, but if you beg nicely they might give in.)  Another way to protect yourself is to open a savings account with your bank and have your two accounts connected (any bad checks will be taken from savings).  Most banks provide free savings accounts, so it's a nice way to protect yourself and gain a little interest (2-3%) on your savings.

If any one else knows a way consumers can protect them selves please let us know.

[wendygirl]

I agree that most banks do this; which is not very nice, but not all banks do.  So I recommend shopping around; some actually process deposits and then lowest to highest on withdraws. At least some banks seem to have a good conscience.

[Nick]

Another thing a lot of banks do is process withdrawals before deposits which is absurd.

[Sean]

Its definitely true that not all banks are created equal.  I have moved and changed banks alot.  I now have Chase, and have found them to be awesome.  ATM's everywhere and zero problems.  I have also had Washington Mutual and they were also good.

I would avoid Wells Fargo like the plague however.  They once charged me 155 dollars in overdraft fees for 10 dollars in gas, a pack of gum, and a pepsi.

[Nick]

The problem with WaMu is that every time you walk in there are lines, lines and more lines. I hate lines. I use United Security which has a few banks between here and Bakersfield but they are great. Every time I walk in if there is someone already waiting an employee will open a new window for me. That's customer service.