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Bank fees pile up for teen

By David McMillin · Bankrate.com
Thursday, December 15, 2011
Posted: 5 pm ET

An Illinois teenager and his mother learned their lessons with bank fees the hard way. In a recent story in the Chicago Tribune, Jon Yates reported that 18-year-old Daniel Ganziano managed to rack up nearly $230 worth of fees in a matter of days at TCF Bank. The catch: he wasn't even spending money.

Here's a breakdown of how a positive balance of $4.85 paved the way to a whopping negative value of $229.10.

  • The teen's bank account balance fell to just $4.85, and TCF charged him $9.95 for failing to meet a minimum balance.
  • This charge caused the account to be overdrawn, which led to additional charges of $28 each day for nearly two weeks.

While fees for overdrawing a checking account or making excessive withdrawals typically show up in an account holder's online statement, this type of story makes me wonder when banks will be forced to take a proactive approach to fee awareness. Of course, I believe account holders should be held accountable for their spending and saving habits, but what about a system that triggers an automated email or phone call once a checking account holder crosses a certain threshold of additional charges? In the barrage of customer service complaints and sub-par customer satisfaction survey results, it seems that this small step would help banks and their customers.

Now, readers might argue some members of the banking industry would love to watch fees pile up for delinquent account holders, but in the end, I think this really only hurts both parties. Account holders wind up in the hole, and I'm sure banks wind up with plenty of customers who can't pay for the charges. In the case of TCF, the institution now has a public relations headache on their hands. The article makes TCF employees initially seem less-than-helpful when the teen's mother attempted to reverse the charges. Who wins?

This seems like an issue the Consumer Financial Protection Bureau should address. Of course, that agency seems to be facing some hurdles.

What do you think? Should banks be required to notify account holders of additional charges before they pile up too high?

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12 Comments
stephen michael
January 17, 2012 at 4:09 pm

This story is 100% true. Same thing happened to me. I had $150 in fees from TCF. Not a 'bank error" but rather bank charges for actually having a positive balance of $3 and change in my account. When I complained, they actually told me that their customers liked these fees. Yes, there is a place for regulation. TCF is greedy and dare I say fraudluant!

john
January 12, 2012 at 8:29 pm

I don't understand this glee at the financial destruction of others. So far almost every comment is "well that's too bad, read the fine print." Why do you all want life to be like some kind of game show? One mistake and you're set back a year. It is sick in the head to take smug pleasure at how stupid other people are for being caught up in a scam.

Starr
January 12, 2012 at 5:33 pm

Please!

He should have been responsible and aware of the status of his bank account. It is his own fault. If he cant manage a bank account - He shouldn't have one!

Banks are not 501c companies. They are businesses, here to make money. They are not a public service, or even a right. They have done nothing wrong, let alone outrageous.

He should put his big-boy pants on and deal with it like a responsible adult, instead of running to Mommy for help.

Cole
December 16, 2011 at 4:19 pm

I know it isn't "typical american banking." Bank of America doesn't do this (I've banked with them), Chase doesn't do this (I've worked for them) nor other banks like Wells (I have coworkers that have worked for them.

If this bank truly is charging OD fees when a bank fee overdraws the account (which I still doubt) then NO ONE should be banking with them.

This sounds more like a story designed to play up the "big bad bank" scapegoat.

Ray
December 16, 2011 at 10:00 am

1. Read the fine print before you open an account. 2. Closely monitor your account or use an old fashoin check register (no way young folk will do the latter). 3. If you don't like the bank's policies, then vote with your feet.

In this case, the tennager (not the mother, let the kid learn something on his own) should negotiate with the bank and threaten to close his account.

As far as regulating all of this stuff no way! Concentrate on "too big to fail" and don't sweat the small stuff.

Joseph
December 16, 2011 at 7:30 am

Cole,

That is typical American banking. Own bank I used to bank at charged 29.95 a day each day it was overdrawn.

Ex-teller
December 15, 2011 at 7:37 pm

To Cole, you obviously bank at a _good_ bank. Not all banks are like that. The story sounds true to me, because it sounds pretty normal.

Cole
December 15, 2011 at 7:22 pm

I question the validity of this story. The banks I have worked for don't charge fees for fees (i.e if a service charge overdraws the account there won't be an overdraft.) It was my impression this was common practice (if not regulation.) My guess is either this entire incident was a bank error (and corrected) or misreported. Not to mention $28 A DAY??? The only daily fees I've heard of are more like $5, maybe $10. $28 a day is just too rediculous to believe.

Alfredo Alvarez
December 15, 2011 at 6:12 pm

Technically, this person was Overdrawn only $ 5.10 the first day the bank charged the account $ 9.95. The account should have been charged interest on that amount at the end of the statement cycle. But charging $ 9.95 everyday is not only greedy but outright wrong. Also the bank could have closed the account by absorbing the nominal balance.