Re:The Fed Is Behind the Capital One/Discover Merger
by nobody9999 on Friday February 23, 2024 @07:25AM
(#39479708)
>But that's terrible advice. Debit cards will debit immediately from your account and you may know that banks are very creative in re-ordering transactions to inflict you maximum pain.
>You have $1000 balance and on the same day issue payments for $10, $20, $30, $40, $50 and $999. If the bank processes those in the same order you get hit with one overdraft fee when the final $999 payment goes through.
>But no, the bank will rearrange that to process $999 first, and hit you with five overdraft fees. So nice of them. I mean nice for them.
According to[0/PDF] the Consumer Financial Protection Bureau (CFPB)[1], reordering transactions in that way is illegal.
Edit: I'd clarify that I am not claiming that this sort of transaction doesn't happen, but rather that it's not a new issue and happens often enough that the CFPB felt it important enough to publicly opine about its illegality several years ago.
Additional Edit: Added more context from parent comment to make their point (to which I certainly wasn't in disagreement) clearer. Apologies for any confusion.
>You have $1000 balance and on the same day issue payments for $10, $20, $30, $40, $50 and $999. If the bank processes those in the same order you get hit with one overdraft fee when the final $999 payment goes through.
>But no, the bank will rearrange that to process $999 first, and hit you with five overdraft fees. So nice of them. I mean nice for them.
According to[0/PDF] the Consumer Financial Protection Bureau (CFPB)[1], reordering transactions in that way is illegal.
[0] https://files.consumerfinance.gov/f/documents/cfpb_unanticip...
[1] N.B.: The CFPB is a US Government agency.
Edit: I'd clarify that I am not claiming that this sort of transaction doesn't happen, but rather that it's not a new issue and happens often enough that the CFPB felt it important enough to publicly opine about its illegality several years ago.
Additional Edit: Added more context from parent comment to make their point (to which I certainly wasn't in disagreement) clearer. Apologies for any confusion.