Need some friendly advice re Consumer Protection (1 Viewer)

[Rob Gardiner]

Hi everybody,

I am a recent victim of some erroneous charges to my debit card. This situation has cost me quite a bit of money. I have put an end to the root problem, and now I'm trying to recover as much of my lost money as possible. I know there are several folks on this board who are familiar with various aspects of the law, and I would appreciate any friendly advice you may have that could help me out.

Several months ago, I signed up for a free membership at an audio book website (like books-on-tape, except they are downloadable MP3s). The deal is: you sign up (providing all necessary billing info), take your 2 free books, cancel your membership before 30 days, and owe nothing. I cancelled my membership on the 29th day -- or, at least, I belived I did.

My first mistake was giving out my debit card number for something other than an actual purchase -- I know not to do that again.

My second mistake was not keeping a close eye on my bank statements. I usually give them a quick once-over to see if there is anything out of the ordinary, but I never bothered to scrutinize it closely because I always relied on my (otherwise accurate) register, with a record of all my transactions.

For the last three months, I have been billed $21.95/month membership fee at this audio book website. This has caused a "chain reaction" of overdraft charges. When my account goes overdraft, the bank sends me a postcard via snail mail which takes several days to arrive. During that time, I've used my debit card several times for my morning coffee, a sandwich at lunchtime, grocery shopping, movie tickets, etc. Each of these transactions is also overdraft, and each one comes with a $34 overdraft fee.

Today, I discovered the problem and called the website's customer service. They did not argue with me in any way, and they refunded the full amount of the erroneous charges themselves -- $65.85. I mentioned the overdraft situation, and was told to call back on Monday morning when a supervisor would be present -- I may be able to talk them into refunding some of the bank fees that were a result of their erroneous charges. I then went to my bank, explained the situation, and got a small portion of the overdraft fees reversed.

When I call the website back on Monday morning, I fully intend to use the flies/honey/vinegar approach. I will politely ask that they refund some of the bank fees that are the indirect result of their erroneous charges. HOWEVER, I'd like to know if I have any standing to "lean on them" a little bit -- if there is some consumer protection law that protects me, or makes them liable for any portion of my losses. If there is anything I can say to them that would give me leverage in this situation, and that would convince them to refund some of the bank fees, I would appreciate any advice anyone can give me.

I've already learned my lesson(s) about being careful to whom I give out my debit card number, and about keeping a close eye on my bank statements on a regular basis, so this will never happen again. Phases 1 and 2 of my recovery have gone well so far, and if anyone can help me with the 3rd and final phase, I would be very grateful.

Many thanks
-Rob

 

[alan halvorson]

Best piece of advice: don't use a debit card. A credit card gives you much more protection. A debit card - virtually none. Undoubtedly, you have good reasons to use a debit over a credit card, but that's my advice if you can follow it.

I don't have the legal or consumer knowledge you seek. The following is just an opinion. I don't know if you'll be able to recoup any of your losses other than the membership charges and what the bank has already refunded. The book site could stonewall you, arguing that you are responsible for maintaining sufficient funds in your account. In fact, it wouldn't surprise me if this wasn't part of an agreement you had to accept. I understand your position but I don't believe it has any legal standing (hope I'm wrong). On the other hand, the book club may be real nice and refund part - I doubt all - of your overdraft charges. Let's hope that they are real nice.

Good luck.

 

[Glenn Overholt]

Personally, I don't think that they will give you anything.

However, what you need to do is to get from them the dates that they took your money and shouldn't have.

This is because your bank is giving you the screws. You'll need to get all of your records in order, but once the bank can verify that the withdrawal should not have happened on a certain date, then the overdrafts should not have happened either. Understand?

Glenn

 

[Jeff Ulmer]

I can't offer much advice either, except that as soon as you have this straightened out, I would ditch this bank immediately. $34 for an overdraft fee, per item? There should be no way to take out money once the account is overdrawn (unless you have overdraft protection).

 

[Glenn Overholt]

Jeff, unless they were done on the same day. The bank does everything at night, all at once. They process the debits before the credits too. I hope they've stopped that, but they did that to me once.

I had a check bounce on me the same day that I had put my paycheck into it. I got the money back, but it shouldn't have happened.

I knew a woman once that took $10 out of her account from the bank, at a drive through, and a few days later, she put her next paycheck in. The only problem was that when she took out the $10., her balance went down to $0.00. Her account was automatically closed, and it took her a week to get her paycheck back!

Glenn

 

[Rob Gardiner]

Thanks for the comments so far, everybody. I had suspected I would have no recourse beyond the partial refund I got on Friday. However, I will still give it a try with the supervisor at the website's Customer Service.


Jeff,

I wish this were the case, but I was told by the bank that debit cards (and the policies that govern their use) are designed to allow the customer to continue drawing, regardless of the account's balance (or lack thereof). That, combined with the fact that I'm notified of the initial overdraft by mail (which takes several days to get to me), allows a single erroneous transaction to cause a "chain reaction" of several overdrafts.

 

[Jay H]

I feel your pain!!!

Be wary of the electronic payment programs too, the ones that can automatically deduct $XX.XX from a bank account on a certain date... Or try to be very up to how much you have in that account. Because if you don't know that you are overdrawn, the stupid CC company is going to try EVERY day to deduct $xx.xx from your account which it's not going to be able to do cause Bank X will snail mail you a postcard to the effect that the account is overdrawn and you now have 2 $30 overdraft charges on your account.

I got so pissed off at my bank for that once that I closed my account that day and went elsewhere. Make you have a boatload of money in any account that is automatically debited via electronic transfer!

Jay

 

[Bryan X]

Banks are just all around horrible anymore. It's to the point now, that they make it difficult to withdraw money from your account without incurring some sort of fee.

 

[Andrew W]

Dude, this is a problem, but if $21.95 causes you to overdraft, you got a bigger problem. You need to manage your bank account a lot better. You should be maintaining a floor of at least a few hundred to account for stuff like this.

 

[Rob Gardiner]

Thanks for all the additional comments, everybody. I don't want this to turn into a generalized rant against the banking industry, but I agree that many bank policies are designed to "trap" the less-fortunate customer, and collect huge profits for the bank at the customer's expense.

Andrew,

I'm not in the habit of spending my last twenty dollars, nor am I in the habit of going overdraft for any reason. (The last time I was overdraft was over a decade ago, when an employer mistakenly wrote me a check with insufficient funds. The bank's policy was to make the funds available to me, whether or not the check has actually cleared -- in other words, the bank invites its customers to unknowingly go overdraft.) However, a hospitalization earlier this year caused me to lose some work and get behind on some bills. I've been catching up on those bills these last few months, so my budget has been tighter than usual. And no, I haven't been spending all my money on DVDs either.

 

[Chris Lockwood]

Just goes to show that debit cards suck. If this had been a credit card, there'd be no problem.

 

[Glenn Overholt]

At 18% give or take.

Glenn

 

[chris_everett]

If you can show that:
1. You did cancel your account on the 29th Day
2. The overdrafts were caused by their charge

Then you will probably get your money back. They will probably want you to fax them bank statements and other information.

(My g/f works for a company that does that sort of "club membership" thing, and this happens with some frequncy)

 

[Nathan A]

Personally, I would go to my local bank branch and explain the situation. The bank can easily credit their own fees if they wish to. Go to the bank; explain everything to an employee; point out how the original charges caused the overdraft fees, and point out on your account how those charges were refunded to your account. Hopefully, they'll refund the fees as a courtesy to you. If not, politely ask to speak to the manager, and explain everything again.

I think you have a better chance getting a refund from your bank than from the book company. I think your chances are decent if you can show that the charges that caused the fees were eventually refunded by the company. I also think you have a better chance if you go the branch in person rather than explain everything by phone.

 

[Rob Gardiner]

Chris L,


This actually seems to be a sticking point! The CS rep (from the website) I spoke to last Friday didn't address this point, but when I spoke to their supervisor today, he told me that they had no record of my cancellation before last Friday. Is it possible I began the cancellation process but failed to complete it? I'm very computer literate and I don't think I've ever made a boneheaded mistake like that before, but that is my curren theory. The website refunded my membership fees without any argument, because they can see that I did not use my membership at any time during the three month period in question, but they refused to refund me any of the bank's overdraft fees due to the lack of confirmation of my original cancellation.

Nathan,

What you describe is almost exactly what I did Friday evening after getting of the phone with the website. I went not to my own branch (where I live) but to the branch near my office, where I deposit my paychecks and do most of my banking. I spoke directly with the "chief" teller, who is also a manager and has one of those nice desks. I had my statements, as well as my own account ledger, all marked up with multi-colored highlighters, in order to show what the errors were and how they occurred. I firmly established that the 3 membership charges (and the bank's own OD policies) were the sole reasons for my ever having gone overdraft at all. After explaining my case, she made a phone call to a manager at my own branch, explained my situation in the best possible light (I appreciate her "going to bat" for me), and secured the partial refund. The partial refund covered the most recent round of ODs, but she explained that it was my responsibility to pay close attention to my statements. The bank was not willing to refund charges for an error that occurred months ago.

When I called the website today, the supervisor (although he refused to refund me any of the bank fees) was friendly, helpful, and sympathetic, and gave me 2 possible further courses of action:

1) Show the bank proof that the charges had been refunded to my account. Since the money is now in my account now, it is as if I was never overdraft at all -- therefore the bank charged me OD fees for "no reason". Personally, I don't think the bank will accept that line of reasoning -- the bank never disputed that the 3 membership charges were erroneous. They refused to refund the ODs that occurred as a result because the errors that caused the ODs were not the bank's errors, but the errors of a third party.

2) If I get nowhere with the branch, call the bank's Customer Service department. The supervisor at the website was under the impression that the branch has a limited ability to refund fees, but that the bank's dedicated CS department may be able to do more, especially if I have fully detailed records (which I do).

Since I have nothing to lose, I will give the bank another try.

Thanks again for all the comments.

 

[Robert_Gaither]

I'd advise print out your transactions, high-light them, and then go to the bank for your side of the argument. By any chance did you have any confirmation that you cancelled the order by the prescribed date if so have you contacted the site audio book? If you have confirmation that you did cancel before their charge date then they have unlawfully taken money from your account without your consent and should be liable for all charges. Double check your bank policy, my bank specifically states on it's policy that any and all bank transactions online that are fraudulent that I'm $0.00 liable and I wouldn't be surprised that your bank does likewise.

 

[Jeff Ulmer]

There are a couple of issues here. If the overdraft is due to transactions from a few months ago, I can see the bank not refunding the amounts, as most of the time, the bank gives you a defined period to dispute any errors on your statement, say 30 days.

While liability due to fraud may be covered, this situation would not be considered fraud, since that implies malicious intent. This was simply an error, and if there is no dispute of the transactions following the issuing of a bank statement, then the problem, and liability, is left to the account holder.

 

[Nathan A]

That's unfortunate.

If you still can't get everything refunded by phone, I suggest writing a pleasant letter to the general/corporate office (not any particular branch). While a letter doesn't seem to go as far as it used to, it can still get some surprising results. If you send one, again, be pleasant, but don't sound like too much of a pushover. (Be firm but not threatening.) If you can manage a tone that extracts sympathy from the rep, you have a chance that they'll help. Perhaps explain how you've spoken with a number of people but have been unable to remedy the situation.

Again, sorry. What's irritating is that it truly is simple for them to refund the fees on their system; for some reason most employees just don't side with the customer. It's even more upsetting when they sit at work all day thinking that they're underappreciated and underpaid by the company, then will defend the company's monetary interests with unwavering fervor. Eh, I know that not all employees are like this, but some certainly are. Don't they realize that it's not their money that they're refunding to the customer? They won't get paid less for doing it!