"I got into this huge overdraft whirlpool that just pulled me under" —Vanessa

Vanessa is a small business owner in commercial interior design who has recently been struggling with unfair banking practices. In May 2008, the bank which she had done business with for ten years suddenly disabled her pre-existing overdraft program. Prior to this, Vanessa had a line of credit with a very reasonable interest rate connected to her account to be drawn upon in the event of an overdraft. Starting February 2008 this option was no longer offered but she was never notified of this change and incurred a number of overdrafts unknowingly. The bank eventually reversed these charges and linked a new credit card to her account; however, the account failed to draw upon the new credit card and again she was being charged overdraft fees.

After many frustrating encounters with her bank, Vanessa changed banks and was enrolled in another overdraft program. Because she has a business account, Vanessa is required to call or e-mail the bank to initiate money transfers. On two occasions, her bank has erred in processing these transactions, and she was charged overdraft fees. The fees are currently being disputed with the bank as Vanessa has documentation of completing the transfers. Vanessa is mostly distressed about the way banks charge overdrafts – she describes: “By the time I am notified about the overdraft, several checks have already processed, and the overdraft of under $25 can become as much as $200 or more. The total sum is mostly bank charges.”

In her frustration, she notes: “Sometimes overdraft charges aren’t posted until 3 days after the day of the overdraft, and then it takes at least 2 days to get to me. This allows a lot of time to pile up charges of $37.50 per check, and $7.00 a day for each overdraft.” When Vanessa contacted the new bank in August and asked for an alternative overdraft solution, she was told that it would involve a line of credit for which she did not qualify. Almost five months later, Vanessa contacted the bank again and was now offered the option of opening a savings account which could be drawn upon in the event of an overdraft. Vanessa is fed up with the errors, overdraft fees, and misinformation from her bank. She plans to close her account as soon as the outstanding disputes are settled.