It’s finally the weekend, and you’ve been waiting all week for your day of productivity. The dry-cleaning needs dropping off. The groceries need picking up. Plus, you’ve been meaning to stop for gas before you hit a clothing store for that jacket you’ve been eyeing for ages. Before your errands, you check your bank balance and transfer the money you’ll need into your debit account. You budgeted all month for this. Yet, when you arrive home, you notice you’ve been charged an overdraft fee or two. Your math wasn’t incorrect. You were just the victim of a shady bank fee practice called debit resequencing.
What Happened to the Order of My Transactions?
Debit resequencing is one of the many unfair or illegal ways banks make money by ensuring you overdraw your account and have to pay as many overdraft fees as possible.
To do this, your bank reorders the sequence in which your transactions occurred, going from most expensive to least expensive. For example, your bank might charge your $200 grocery bill first, then your $60 jacket, followed by your $40 gas fill-up and your $20 dry-cleaning charge. By changing the order of your transactions, your funds drain faster, leading to more overdraft fees after you’ve hit $0.
Unfortunately, even if you transferred the amount of money you needed from another account before you purchased anything, banks will withhold that transferred money under the guise that it’s “pending” even if you can see the money in your account. This leaves you with the “available balance,” the amount of money that was in your debit account before transferring. In this situation, if you had $50 in your account at the start of the day when you transferred $300 to use, rather than having up to $350 available to spend, your bank would only allow you to spend $50 before they began charging overdraft because the $300 transfer is still pending.
With $50 to spend and your bank reordering transactions, you’d be charged an overdraft fee on every transaction you made.
How Is This Fair?
It isn’t. Yet, banks are charging exorbitant, unfair, and borderline illegal fees to those least likely to be able to afford them. In fact, banks charged a collective $12.4 billion in overdraft fees in 2020. Luckily, more and more consumers are standing up to these unscrupulous practices by pursuing legal action.
Litigating Against Unfair and Illegal Bank Fees in the Inland Empire
The Financial Services attorneys of McCune Wright Arevalo, LLP, have been fighting back against absurd bank fees for decades. With more than $1 billion reclaimed, including $203 million from Wells Fargo, our team can help you get justice. If you’ve been unfairly charged overdraft fees after your bank changed the order of your transactions, contact us today or call (855) 976-3154.