[Touche]

> They know exactly what they're doing. They're rich bankers robbing poor people.

I can understand thinking that the "correct" thing to do here is to simply not allow a transaction when there aren't sufficient funds, but this language goes overboard. It's not robbing a person because they were unable to keep track of how much money they own and adjust accordingly.

[Bud]

No. Emphatically, no. It IS robbery. Have you ever been a poor person? Have you ever been overwhelmed with depression and the panic of a lost job, a few dozen bills you probably can't pay, the shame of asking friends and relatives for help, and in so doing, risking your relationships with those people and your own self-esteem?

What you're missing here is that poor people KNOW that they are poor and right on the edge. They are already making a lot of adjustments that you probably can't even conceive of. They have a daily, hourly even, intellectual load from financial panic that more privileged people cannot even imagine.

The banks are the guilty party, here. They know that some of their customers are near the edge and in trouble, and they are strategically choosing to exploit them. Period, paragraph.

[yummyfajitas]

Have you ever been a poor person?

This is a fallacy. If you were to claim AGW occurs or that outer space is a vacuum, it would be a fallacy for me to say "have you ever been planet-sized body warming due to excess CO2?" Of course not, but one can still reason about such things.

If you are claiming that the poor are incapable of taking responsibility for their choices, recognize that there is a term for this: incompetent. Are you claiming the poor are incompetent and unable to make choices like the rest of us?

[OrwellianChild]

@yummyfajitas - I often appreciate the clear thinking you can bring to a discussion, but I just as often see you reduce human beings to logic machines in ways that are unfair to both them and your intellect...

There is a large and growing body of research around the limitations and capabilities of human decision making that shows just how/when these gaps appear. At a very basic level, poor (and otherwise distracted/overwhelmed) people suffer from decision fatigue [1]. There is much more going on, however, and I'm sure you'd find the studies fascinating, given your penchant for data-driven analysis. I cannot recommend Daniel Kahneman's Thinking, Fast and Slow for starters...

[1] https://en.wikipedia.org/wiki/Decision_fatigue

[Touche]

> No. Emphatically, no. It IS robbery. Have you ever been a poor person?

Yes, I overdrew my account when I was in college and had $50 to my name. It was my mistake, I made a purchase unsure of how much money I had.

I also used to work for a bank that gave out RALs so I'm perfectly aware of the unethical behavior that happens in banking. So call it unethical, call it what it is. Using inaccurate alarmist language does not help the matter.

[tdfx]

As a college student, I am assuming that you didn't have much money, but also likely had rather limited expenses. To the family with children that has $50 to their name, a rent payment, childcare expenses, etc, most of which they can barely afford already, an unexpected overdraft can be the trigger that sends them off a financial cliff.

Poor people often make very bad financial decisions. But so do rich and middle class people. The difference is that the poor people have no one to turn to for help. Exploiting that may not fit the statutory definition of robbery, but it meets it in every other way I can think of.

[Touche]

All true, but you can't regulate away bad decisions. By attempting to do so you just make the next scheme even more disgusting.

[maehwasu]

Challenge accepted. I am going to regulate this problem away. New proposed regulation:

1. Banks must make rejection of a charge, rather than overdrafting, the default.

2. When overdrafting is enabled, cap the fees at some amount (say, $5), and also cap the amount the account can be overdrafted at, say, $50.

Looks like a pretty disgusting scheme to me. /sarcasm

[Swizec]

Funnily, that's how it works in Europe. Or at least anywhere in Europe that I've had an account.

[logicchains]

You can't regulate away bad decisions, but you can regulate away the consequences (by shifting them onto the wider population). Not that I support this, as I believe it unfairly penalises people who make good decisions, but it's certainly possible.

[nicksergeant]

Being in college with $50 to your name does not qualify you as poor.

[rfrank]

The unethical behavior in question is robbery. End of story.

[pyre]

Large banks will do things like structure charges so as to extract the maximum amount of overdraft charges. For example:

  You have $40 in your account. You spend $20, then $12,
  then $5, then $120. One would logically conclude that at the
  end of the day, the bank will resolve these *in order* and
  you will have a single overdraft fee. Large banks *cough*
  Bank of America *cough* will explicitly structure those charges
  to resolve like this: $120, $20, $12, $5. Now you have 3
  overdraft fees ($35 a pop when I was with BoA) instead of a
  single overdraft fee.

Do you not see anything morally and ethically wrong with this?

[jeffasinger]

The even crazier thing about your example, is that they have different offerings for their high net worth" clients, and with those offerings, the structuring is usually much more in the favor of the client than what someone walking in off the street will get.

Essentially, a poor person will be charged higher fees than a rich person.

[rcarrigan87]

I've personally experienced this, so frustrating!

[Touche]

> Do you not see anything morally and ethically wrong with this?

That's not the language the person I was responding to used.

[danharaj]

They don't have to because most people know that powerful institutions tend to act in bad faith in order to extract as much gain as they can from the vulnerable.

[Touche]

Yes! We do know this. Which makes getting screwed a highly avoidable situation.

[pyre]

So when people act in bad faith it is "ok" so long as we mistrust them anyways?

[tsotha]

Wasn't the law changed so they can't do this any more?

[ars]

Yes, it was.

[karamazov]

Banks make keeping track of the money in your account intentionally difficult. You can't just check your balance and assume that you can spend what's there.

Instead, your balance includes only processed transactions, whereas your account also has a list of pending transactions that can hit your balance at any time. Pending transactions can also disappear from your account, only to come back as a confirmed transaction. In effect, you can't be sure of exactly what's in your account unless you manually keep track of every charge you've made.

Banks do more than this to make overdrafts difficult to deal with. For example, Bank of America intentionally processes your transactions from largest to smallest, ensuring you'll git hit with the maximum number of overdraft fees.

e.g: if you have $10 in your account, and you make a $3 purchase, a $4 purchase, and a $12 purchase, they'll run the charges in the order of $12, $4, and $3, hitting you with three fees instead of one.

tl;dr: banks love overdraft fees and do whatever they can get away with to hit you with them.

[jellicle]

> e.g: if you have $10 in your account, and you make a $3 purchase, a $4 purchase, and a $12 purchase, they'll run the charges in the order of $12, $4, and $3, hitting you with three fees instead of one.

Even better, if you have $10 and also a $500 paycheck hitting your account that night, which is to say that the bank KNOWS there is no overdraft and that you have the money in the account, they'll process them in this order: -$12 (fee), -$4 (fee), -$3 (fee), +$500 (most eaten by the fees).

And some programmer programmed that for them. Intentionally.

[CydeWeys]

I believe there is now a national banking regulation in effect that requires all credits in a day to be processed against your balance before all debits. So in your second situation, at least, you would no longer be hit with fees.

[moron4hire]

If that is the case, then PNC hasn't got the memo yet.

[moron4hire]

They also transact debits before credits, so if you realize you made a purchase that will overdraw you, you can't deposit money right away to avoid an overcharge. I've gotten hit with low balance fees for that with PNC. Yeah, no, not overcharge. They didn't like that I very briefly had $5 less than $2000 in the account.

They call it "maintenance". Like an account at $1995 needs some screws tightened or something. This isn't the 1920s. There isn't some clerk somewhere checking ledger sheets. It's all digital. It doesn't matter what value is in there. It's just a bit pattern.

In other "you have got to be fucking kidding me" moments, I once got charged a late payment fee on a loan that said I owed $0 that month because I had been making payments ahead for several months prior. Had a rainy day, needed some extra cash, figured since it said "you owe nothing this month" that meant I owed nothing that month. Apparently, buried deep in the promissory note, there is a term whereby I was required to pay a certain minimum every month, regardless of what the statement said.

They then used this as an excuse to jack up my interest rate. Aren't student loans grand?

[knowaveragejoe]

> Banks do more than this to make overdrafts difficult to deal with. For example, Bank of America intentionally processes your transactions from largest to smallest, ensuring you'll git hit with the maximum number of overdraft fees. e.g: if you have $10 in your account, and you make a $3 purchase, a $4 purchase, and a $12 purchase, they'll run the charges in the order of $12, $4, and $3, hitting you with three fees instead of one.

I remember hearing about this a while ago, is that still going on? I thought some sort of regulation came into effect that prevented that, and that's why I was just then hearing about it.

[kelnos]

If the customer had set up the overdraft "loan" feature, then sure, I'd agree with you. But they didn't. How is it sane (and legal) to automatically loan someone money to pay something, without their permission, when you can set whatever repayment terms you want? Declining for insufficient funds is the only correct thing to do in that case. And yes, banks will usually charge a fee for that, too, but at least it'll only be a one-time fee.

[cookingrobot]

It's a not consensual extraordinarily high interest loan. Robbery is a fine label to use for that.

[Touche]

It's absolutely consensual; it only happens if you overdraw your account.

[cookingrobot]

They're not asking for a loan, they're asking to withdraw their own money that they put in the bank. The bank deliberately chooses to turn this into a loan if they accidentally ask for more than is currently there.

[fredkbloggs]

Let's talk about the word "accidentally".

Suppose I drive to a bar, have three beers, and drive home. I don't bother to check my BAC; I just assume I'm below the legal limit and can drive safely. On the way, I accidentally run over a budding young Progressivist on the street, who then dies. When the sheriff shows up, he finds that my BAC is 0.09 -- just over the limit!

Surely, you will agree that any penalty I am assessed for this should be minimal. After all, I did not intend to kill anyone. I did not think I was drunk. Sure, I didn't bother to check, or to assume the worst and take a couple hours' break before driving. But it was an accident. I didn't know that I was over the limit. Maybe I hadn't even read the law, and didn't know what the limit was, or what the penalties would be for exceeding it. Obviously, any big, mean, nasty "justice" system that would impose a heavy penalty on me for this act is evil and unethical.

Right?

[Retra]

Except, in your analogy, you are being force-fed alcohol by your landlord, car insurance laws, gas stations, any children you have, public dress laws, ISP, electric company, phone company, and the biological need for food.

This puts your default BAC at somewhere between .06 and 0.085 at any given moment. Now if you go over 0.09, do you think maybe that might happen on accident?

[fredkbloggs]

Nonsense. Nothing obligates you to use your checking account for the vast majority of ordinary purchases. And for those that you generally cannot avoid (usually only the rent), nothing requires that you fail to record the amount you spent and track the amount remaining. If you aren't sure of your records or don't care to keep them, use cash for everything else.

People with far less education than today's Americans have been successfully balancing checkbooks for over a century. My great-grandfather was a dirt-poor coal miner with a fourth-grade education and he never had any trouble avoiding overdrafts. And yes, he had -- and used -- a checking account for most of his life. Ignorance and carelessness are just excuses; they do not absolve you of your responsibilities.

[jrockway]

Did this hypothetical event take place in New York City? If so, the NYPD would probably throw a parade in your honor.

Even if you were a driving a commercial truck and ran over a kid walking to school while driving without a license, they still wouldn't press charges.

[fredkbloggs]

Since this thread isn't about police misconduct, let's assume not. If you insist, feel free to assume it was an older straight white male rumored to vote Republican bouncing around under my wheels.

[rokhayakebe]

It is robbery, I am perplexed how you fail to see it.