Consumer complaint received 2017-11-30
Company: U.S. BANCORP
State: WI
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Fee problem

Complaint:
I have concerns regarding the practices at US Bank. I spoke with a bank teller by phone about overdraft fees on my account for purchases that had cleared the bank.These concerns are regarding purchases made by debit card. 

She explained to me that when the vendor/merchant actually collected the money, I did not have funds available. So, I further inquired as to why then did those transactions clear 3 days earlier. She goes on to say that @ the time I made the purchase ( on the day I swiped the card ), that the funds were available. She explained that when the card is swiped the funds are HELD ; however, when the vendor/merchant collects those funds, if other purchases were made in between that time, then they look @ what 's in your account @ the time the vendor collects. If the funds are not available, then they pay those charges and charge you an overdraft fee. 

This appears to be very underhanded to me. 

First, if they are holding the money for those transactions, then the money was available. Why are n't they paying the vendor with the money they are holding, which would prevent them from having to charge you an overdraft fee? Why are they lookiing at the balance of your account x number of days later to see how much you have available, when they are holding enough money to clear the charge without fees? 

Secondly, if they are holding money for charges you make, then they reduce your available balance. When they reduce your available balance, then it makes perfect sense that you would then hot have enough money to cover charges on the day that the vendor collects ( which may be 2 to 3 business days later ) - and yet, they are still holding the money. They pay them against the reduced insufficient available balance ( while still holding the money ). Which creates a case for them to charge you overdraft fees. 

Further, if other transactions are made in the interim, you available balance is further reduced, and it becomes an endless cycle of 'we 're holding the money for your transactions, but when the vendor elects to collect those monies, we 're gon na determine whether or not you have the money to pay them - not based on the amount we are already holding - but on whether or not you have enough money at that moment. If you do n't have it, ( becuz we 're holding the money AND/OR because we 've reduced your available balance because we 're holding money ) then we 're gon na charge you a fee & pay it for you. ' Yet they are STILL holding onto the amount of money that would 've paid it in totality w/o there being any fees. 

And since now you have fees, your account balance is further reduced, so therefore, you may not have money to cover purchases you made in the interim, when you did have available money because at this point, your account is overdrafted This sounds to me like unscrupulous banking practices. Many banks have had class action lawsuits filed against them for these types of tactics, and I believe that US Bank should be investigated into further. 

Clearly, their transaction policies are putting their customers in unwarranted financial distress - to the banks benefit. I would like to know who I can contact that may be willing to investigating what I believe is underhanded practices.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation