If you have ignored our repeated please to refuse to opt-in to Chase’s debit card overdraft program, perhaps you will trust a higher authority. Consumer Reports came out with a blog post a few days ago urging consumers to refuse the overdraft program.
Under new Federal Reserve rules that become effective this Sunday, August 15, debit card purchases or ATM transactions that would exceed a current customer’s balance will not be processed unless he or she has agreed in advance to overdraft protection. If you’re currently enrolled in one of these programs you’ll automatically be opted-out; if you wish to continue you must re-enroll and provide your signature.
Previously, banks automatically signed up consumers for the service and then charged them hefty fees whenever it covered an overdraft. Those fees add up to billions in profits, so as the date looms you’re likely to see a lot of hype from your bank promising you peace of mind by enrolling in its program. Before you do, remember that there are often much cheaper ways to cover transactions that exceed your balance.
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I received the below junk mail from Chase a couple of weeks ago. There are a couple of points that need clarification:
– FREE Chase Debit Card with built-in security – you don’t pay for any unauthorized card transactions if your card is lost or stolen and you report it promptly
There are way to0 many stories floating around the internet of people who have had their cards stolen and Chase refuses to consider the charges fraud. Their fraud controls often miss obvious fraud.
– FREE voice and e-mail alerts – we will notify your if your balance is low to help you avoid overdrafts
Yea, not so much. Their alerts come at the end of the day, after your credits and debits for the day have been processed, and thus will not help you avoid overdrafts on any particular day.
On a side note, I’ve seen a TON of Chase advertising lately; perhaps they are realizing that far too many customers (and their deposits) have and are heading for the exits and are trying to get new customers.
I’ve heard a number of stories where people are contacted by Chase to say their loan modification has been approved and then later told that it is no longer approved or has never been approved. I just got this story from a reader:
Chase has called me twice telling me my loan modification was approved and only days later I receive a letter saying I was denied. This time they say the reason (always before it was the bogus missing doc thing) I wasn’t over 60 days later (I’m current) and that I don’t have a hardship. I no longer received $1500/month child support and I’m paying almost 45% in a minimum payment due to reset in December moving it up to 50% … and it’s adjustable. I called them and they say they don’t know why someone would call me and say I was approved. I think they are called under false pretenses to obtain information. This should be illegal. I also notice they no longer say “this call is being recorded” … surprise. What can I do? Chase Sucks!!! 1 year 3 months of nonsense.
I could think of a number of reasons they would be doing this but chief among them is to get people to pay more money than they might if they understood they would be denied in the end.
Chase has been highly criticized for its practice of posting large transactions first at the end of the day, thus making it more likely that smaller transactions will cause more overdrafts and Chase can charge more overdraft fees.
Chase has defended this practice claiming that this is what customers want, as it insures that big important payments will be paid. Consumer groups widely dispute that this is really what consumers want.
Recently, Wells Fargo was ordered by a judge to pay $200 million to customers for overdrafts generated by this exact scheme.
Chase’s response to the judgment is to claim that they have no intent of changing the way they apply debits.
To be fair, it isn’t just Chase that does this; it seems to be common at large banks and BofA, Wells Fargo (as mentioned above) and Citibank all do this.
Last month, banks had to stop automatically activating debit card overdraft protection for new accounts, a practice which they have been doing for years.
Today, August 15th, banks must stop providing debit card overdraft protection for existing accounts unless customers explicitly opt-in to this service.
But this doesn’t apply to every kind of transaction. The following types of transaction can be used to take money out of your checking account:
• Writing a check.
• Authorizing an electronic transaction using your account number, or the bank’s online bill payment service.
• Setting up repeat payments with your debit account number for something like a cell phone bill or a gym membership.
• Withdrawing money from an ATM.
• Using a debit card at places like stores, restaurants and gas stations.
Only the last two, ATM withdrawls and debit card purchases are covered by the new overdraft protection rules. If you do not opt in to overdrafts (AND YOU SHOULD NOT), then ATM and debit card purchases may be rejected and no fee will be charged.
But, importantly, the new law doesn’t affect checks or electronic transactions; fees can still be charged on those if the account has insufficient funds.
Very importantly, this means payment services like PayPal. You can still rack up an overdraft charge if you try and pay for something with PayPal and you have insufficient funds. Unfortunately, most people would expect that this would work just like using a debit card, but it will not. Banks can still charge you an overdraft fee for this, so be careful.
This gripe came from my mother.
With WaMu, outgoing wire transfers were free.
With Chase, outgoing wire transfers cost $45, about the steepest charge in the business.
My bank charges me $25 for sending a wire transfer.
With Chase, incoming wire transfers cost $11.
With my bank, incoming wire transfers are free.
I am unable to verify the fees because Chase does not make its fee schedule easily available (I can’t find it).
Interest rates for 30 year fixed-rate mortgages have fallen to record lows. They averaged 4.44% on Aug. 12, according to Freddie Mac, the lowest level since the organization started keeping records in 1970. But consumers can get even better deals — at smaller banks and credit unions.
At the three big banks — Bank of America (BAC), Wells Fargo (WFC) and JPMorgan Chase (JPM) — rates average 4.66% on 30-year fixed mortgages, according to Bankrate.com. The Wall Street Journal reports that “St. Louis’s Heartland Bank is offering a rate of 4.5%. Acacia Federal Savings Bank comes in at 4.25%. And Rockland Trust Co. in Boston is offering just 4.13%. (None of these offers include “points,” or extra fees to secure lower rates.)”
Furthermore, “the discrepancy is widening, and I only expect it to get wider in the future,” the Journal quotes Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter, as saying.
The reason for this trend is consolidation among home lenders during and after the financial crisis. The three large banks above accounted for 56.5% of new mortgage originations in the first half of this year, according to Inside Mortgage Finance — up from just 36.6% in 2007, reports the Journal. These banks feel less need to compete on price.
A couple recently was able to get their foreclosure by WaMu then Chase dismissed and the court went a step further and found WaMu and Chase guilty of fraud.
At the heart of the issue was the fact that the bank was claiming it owned the loan rather than being the service of the loan which was owned by Fannie Mae. The loan was originated by another bank unrelated to WaMu or Chase so neither bank (WaMu, then Chase as the purchaser of WaMu’s assets) had the right to claim that they owned the loan.
The court found WaMu and Chase guilty of fraud because they knew as servicer and not owner of the loan, they were not entitled to foreclose; only Fannie Mae was entitled to foreclose.
11. The court find by clear and convincing evidence that WAMU, Chase, and Shapiro and Fishman committed fraud on this court.
Fees & charges | admin August 17, 2010 | 
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