Consumer complaint received 2020-06-30
Product: Checking or savings account 
Sub-product: Checking account
Issue: Problem caused by your funds being low
Sub-issue: Overdrafts and overdraft fees
Company: REGIONS FINANCIAL CORPORATION
State: FL

Complaint:
As a single father battling XXXX, I have been charged {$6000.00} in bank fees over the past 5 years. The banks are oppressing poor, lower-class citizens. Here 's how : Assume the following : There is an account with {$200.00} and the account opt-in to overdraft coverage. 


The account takes transactions of {$60.00}, XXXX, XXXX, XXXX, XXXX, and XXXX. It has the available funds to cover these transactions at the time of authorization. Consider these six transactions pending. Therefore the available balance is {$0.00}, and the posted balance is still {$200.00}. 


The account makes another transaction of {$1.00} the next day ( say from an auto-bill transaction ). This {$1.00} transaction overdrafts the account by {$1.00}. This transaction is also pending. The available balance is now $ XXXX, yet the posted balance still {$200.00}. 


The {$60.00}, XXXX, XXXX, XXXX, XXXX, and XXXX transactions post. This occurrence puts the posted balance at {$0.00}, with an available balance of $ XXXX. Since the available balance is negative at the time the transactions post, the account will be charged overdraft fees for all of these transactions. These fees will equal {$210.00}. This occurrence will put the account at - {$210.00}. 


The {$1.00} transaction posts the following day. The bank will also assess another {$36.00} fee for this transaction. This occurrence will put the account at - {$250.00}. 


Total fees in example : {$250.00} for a {$1.00} overdraw. 

My bank has even all-but-confirmed this scenario with me in an email correspondence. I feel this may rise to the level of unconscionability, Full correspondence with bank : Me : >Hi [ redacted agent ] -, >Assume the following : >There is an account with {$200.00} and the account opt-in to overdraft coverage. 

>The account takes transactions of {$60.00}, XXXX, XXXX, XXXX, XXXX, and XXXX. It has the available funds to cover these transactions at the time of authorization. Consider these six transactions pending. Therefore the available balance is {$0.00}, and the posted balance is still {$200.00}. 

>The account makes another transaction of {$1.00} the next day. This {$1.00} transaction overdrafts the account by {$1.00}. This transaction is also pending. The available balance is now $ XXXX, yet the posted balance still {$200.00}. 

>The {$60.00}, XXXX, XXXX, XXXX, XXXX, and XXXX transactions post. This occurrence puts the posted balance at {$0.00}, with an available balance of $ XXXX. Since the available balance is negative at the time the transactions post, the account will be charged fees for all of these transactions. These fees will equal {$210.00}. This occurrence will put the account at - {$210.00}. 

>The {$1.00} transaction posts the following day. The bank will also assess another {$36.00} fee for this transaction. This occurrence will put the account at - {$250.00}. 

>Total fees : {$250.00} for a {$1.00} overdraw. 

>Is this right? 

>Thanks, > [ redacted self ] Agent : >Good morning [ redacted self ], >While I very much appreciate you taking time to understand how the posting order and overdraft occurrence works I would not be able to give insight as to if your scenario is correct or not. I can say that regardless of how many overdrafts your scenario would cause, if the account in the scenario was opted-out than the {$1.00} transaction would not have been authorized and an overdraft instance would not be a consideration. 

>Thank you, > [ redacted agent ] Me : > [ redacted agent ] - >Thank you for the quick response. 

>Why would you not be able to give insight to whether this scenario is correct or not? 

>I understand that if the account was opted out that it would not have been assessed any fees. Thank you for this subtle advise. 

> [ redacted unrelated sentence ] >Thanks, > [ redacted self ] Agent : >Hi [ redacted self ], >With a hypothetical that was not something processed through our system I can not be certain what the outcome would be. While I looked at scenario and the math it appears you are on the right track with how it would work due to the fact of the available balance being the negative {$1.00} but I can not say for sure the overdrafts in your scenario would be accurate. 

>While I appreciate your understanding and continuing to ensure you completely understand how the posting order and overdrafts work as it is an important aspect of operating a checking account. I would also recommend taking time to utilize some of the tools and resources available through our Online Banking. One tool specifically would be the Account Alerts. These would be a preventative measure where you can set a Balance Limit and any time your balance gets below a given balance ( i.e. {$50.00} ) you can opt for a text or email alert. There is also another option regarding setting up a specific account to be linked for Overdraft Protection that would be too wordy for an email that I would be happy to go over with you also. 

>Like I said, I really do appreciate you taking the time to understand how the overdrafts work, I prefer to set up measures that will prevent the situation of an overdraft coming up. I am not deflecting your scenario in any way, it is just difficult for me to comment on something that could happen that hasnt actually been processed in my system. I will say that your scenario is very similar to what we talked about the other day but with easier transaction amounts and balances to help see what would happen. 

>Thank you, > [ redacted agent ] Me : >Hey [ redacted agent ] - >Thank you for your correspondence.

>The issue I take with the ruling in this hypothetical is the only reason the account 's available balance is in the negative is because the funds were " set aside '' [ agent 's words ] for these exact transactions [ you charged overdraft fees for ], for wh
en it came time for them to post.

> [ redacted self ] Agent : >I understand and that makes sense. With everything that can happen with transactions nowadays the computer system can not run with hypotheticals built in or even take into consideration the balance when the transaction was authorized. A pending transaction can post for more, less, not at all or at a delayed time not the current or next business day. It is important also to know that with your scenario, if a deposit was made the day the {$1.00} transaction was made that brought the account positive that would avoid an overdraft situation from occurring, only if made during that business day. 

>Situations like you presented do happen and cause both confusion and problems. The way transactions show on an account are continuously being updated based on new processing methods and trends for how customers use their accounts. I have been in banking for 8 years and have seen 2 updates which both were in favor of the customer. 

Me : >Hey [ redacted agent ] - >It 's almost as if the transactions are being posted against the available balance when they should " post '' against the posted balance. 

>Mainly if the account has a positive posted balance after the transaction clears, a fee should not be charged yet, or if the available balance was there at the time of the transaction, a fee should not be charged yet ; either way would make more sense, at least to me. It would seem this is where the system disagrees, and where much of the confusion stems from. 

>In any case, I am moving on and putting this behind me, although I do think it is rather strange. And, please, excuse my candor. I thank you for all your help. I understand that time is invaluable and I greatly appreciate your continued efforts. I look forward to our future business. 

>Have a great day! 

>Regards, > [ redacted self ] Agent : >I can see what you mean. And you are partially right, a transaction counts towards both posted and available balance, the system will take into account if either balance goes into the negative and if so, an overdraft has resulted due to that particular transaction. What you are saying does make sense but is just not how the regulations have been set up. 

>I was glad to have helped you with this issue and no apology is needed. I understand this is and can be frustrating but I am thankful that you were willing to take time to understand that happened and work through it constructively. To me that makes these types of interactions worth it. 

> [ redacted unrelated sentence ] This correspondence came after I had already tried pleading with the bank manager in person at the branch, while the exact scenario laid out was happening to me but with different transaction amounts. The bank refused to refund the money and stated that is how the system works. If you overdraft your account, you are going to pay the fees, even if you don't agree that each transaction was legitimately an overdraft.

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