Consumer complaint received 2022-02-16
Product: Checking or savings account — Checking account
Issue: Problem caused by your funds being low — Overdrafts and overdraft fees
Company: COMMUNITY FINANCIAL SYSTEM, INC. (NY)

On Saturday, XX/XX/2022, I received an email from XXXX informing me that my bank ( Community Bank, NA ) had declined a funds transfer from my checking account due to insufficient funds. This surprised me, because I had never overdrawn an account in my life. 

I went to the bank website and I discovered that the checking account had indeed been overdrawn since XX/XX/2022. 

However, from the date of the event, even until the time of this submission, I have received no electronic communication from my own bank to alert me to this situation. I have received no email, no text messages, no phone messages -- even though the bank had all of those contacts, and even though I had signed up for electronic statements and was accustomed to receiving all of my communication from the bank electronically. I have been receiving email communication from this bank concerning statements and fraud alerts for several years. I had no reason to believe -- and the bank 's past behavior gave me no reason to believe -- that other important communication, such as overdraft notices, would not also arrive electronically. 

Upon investigation, I discovered that I had received several written notices from the bank through the regular mail. However because I was not accustomed to receiving consequential communications from the bank via regular mail -- not even statements -- I had left them unopened. The first of these was dated XX/XX/2022. Allowing three working days for delivery the earliest it could have reached me was XX/XX/2022. However, by this point the situation was already out of control. The account had already incurred seven paid-item fees for a total of {$250.00} in overdraft-related fees on an overdraft amount of {$400.00}. 

The first part of my complaint, then, is that I was not notified in a timely manner of the overdraft. I had been encouraged and conditioned by the bank to expect important communications to arrive by email. However no email notifications were sent. Notifications sent by regular mail would not have arrived in time for me to act to prevent additional fees from accumulating. 

The second part of my complaint is that the overdraft fees are vastly disproportionate to amount of the overdraft. As of XX/XX/2022, which was the first working day on which I was both aware of the situation and able to contact the bank, the negative balance in the account was {$1100.00}, of which {$540.00} was fees charged by the bank and {$640.00} was from transactions. 

Additionally, the bank was now charging a daily {$5.00} fee on the account, which works out to an annualized interest rate of 282 % on the actual amount of my overdraft, exclusive of fees.

When I spoke with the bank manager on XX/XX/2022 the negative balance on the account, exclusive of fees, stood at {$640.00} after two weeks. Compared to the average positive balance in the account, which had been in the thousands for more than ten years, this is a trivial amount. I don't get anything extra when I have a {$10000.00} positive balance. If once in ten years the account goes negative by a few hundred dollars does fairness demand that I be severely penalized? It's absurd. I pointed out the problems with the notifications and the excessive nature of the fees. I also pointed out that I had done the responsible thing and contacted the bank as soon as I was aware of the problem.

I proposed a simple and gentlemanly solution. I would make up the negative balance with an immediate wire transfer and the bank would withdraw its fees. The manager sought authorization from the home office, however the most they would allow was seven of the then fourteen {$36.00} charges and seven {$5.00} charges, for a total of {$280.00}. 

This, however would still have left me with {$250.00} in fees on an overdraft of {$640.00}, with more fees to come. The outside transfer would have taken several days to complete, during which time additional charges and resubmissions, over which I had no control were still posting to the account. I have since tried to get XXXX to redirect their resubmissions to a different account however their system apparently makes this impossible. 

On XX/XX/2022 I proposed to the manager that I would make good on the overdraft amount with a transfer and they could decide whether or not to come after me for the fees. But I later discovered that this proposal is complicated by the fact that child support payments that are being paid to the account electronically can not be immediately redirected. I have had to send a letter to XXXX NY, which will take up to two weeks to be processed. I do not know, then, at this time, what the total overdraft will be. And neither do I have access to the child support payments that are being deposited in my account, which are intended for the benefit of my children and not the benefit of the bank or its shareholders.