Consumer complaint received 2024-11-02 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem when making payments — Problem during payment process
Company: M&T BANK CORPORATION
State: NY

Complaint narrative:
I took out a cash advance for the first time ever after almost accidentally overdrafting my checking account. This was a simple mistake of allocating funds to the right accounts at the right time. It happened to be at the end of the month ( XXXX ) and I knew upcoming auto payments would happen before the fund transfers went through, so I used the cash advance to prevent an overdraft. 

I have an amazing credit history of 10+ years with this credit card and have never missed a payment, and always pay for all my purchases from the prior month at the start of the next month. 

At the beginning of XXXX I paid for all my XXXX purchases, like I always do, which included a {$310.00} cash advance. The payment I made at the beginning of XXXX was XXXX the minimum payment required. But still somehow, later in XXXX I received a charge for interest against this cash advance. I called m & T to see what was up. Escalated to a manager, who told me that funds allocate to cash advances last. This manager told me I would have to drive the account balance to XXXX in order to pay off the cash advance, saying that payments always allocate to purchases first. This immediately seemed wrong and confusing to me and like an endless loop that would be very hard to get out of because I use the card regularly, daily, and it suddenly seemed like it would be very cumbersome to officially pay off this cash advance. She ( manager ) suggested I call m & T to make the payments with an agent. In 10+ years using this card I've never had to call to make a payment, and with the existence of online payments, this seemed like ridiculous hoops that I needed to jump through to pay off this cash advance. This manager repeatedly said that payments allocate to the highest APR balances last. This felt very wrong and shady to me as someone who is well versed in personal finance. She repeatedly made reference to a contract clause that spelled this out for my credit card, and at the time of our conversation I was not familiar with this clause. The conversation ended and I proceeded to look it up in my credit card statement. 

The clause related to payment allocation is XXXX clear. Payments over the minimum required payment allocate to highest APR balances first. I called m & T back and spoke to two other individuals who agreed with this, and the interest charge was refunded. I thought this was the end. 

A month later in XXXX I again saw an interest charge related to this cash advance. Although it was only a few cents, I knew there was something bigger going on here, and out of principle was very upset. I called m & T again ( credit card division ) and ask to speak to a manager. I spoke to a gentleman who AGAIN regurgitated the language used by the previous manager that funds allocate to the highest APR balances last. However this time, I was well versed in the payment allocation clause, and tried to explain this to him. He gaslighted me, and somehow, this manager of the credit card division was not able to pull up a copy of the payment allocation contract clause on the fly to verify what I was saying on the phone. 

This payment allocation clause is driven by New York State law. It's very clear to me after going through this experience that M & T 's SYSTEM is automatically allocating payments in an illegal manner. It is automatically allocating payments to highest APR balances last, keeping people in a loop of paying interest charges as long as possible, and making it very difficult to get out of the loop. 

I am infuriated for my fellow human beings and customers of M & T that this Bank is breaking the law in a systematic and automatic way to siphon off interest charges from struggling people. I am infuriated that this is targeting something like a cash advance, which would most likely affect people already in a tough financial position. The fact that two separate managers in different divisions thought that payments were allocated in a manner that breaks the law, and proceeded to gaslight me about what should actually be occurring is even more infuriating. Many people who aren't savvy in contracts and personal finance would have been tricked by these managers. Many people would not have been able to get to the bottom of this. Many people are being scammed by M & T. It's very clear to me now that policies and training within M & T support a payment allocation structure that is violating New York State law.

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