Clearing practices allow for the collection of fees and not for the benefit of the customer.
It has happened before and we do our best to keep our account balanced in order to avoid unnecessary fees however the practices in place by this financial institution are devised to collect the maximum amount of fees possible.
The account representatives tell me that the computer clears and posts items in the order that they are received. This *** be true but it leads to excessive fees.
In addition, the bank allows debit cards to be run if there is insufficient funds in the account due to soft-posted items. This also allows for fees.
This weekend I have paid over $150 in fees and since the bank is closed until Monday and my account is negative due to the fees, I fear that by Monday morning I will incur another $100 in fees.
Friday I had soft posted items in my account one of which included my direct-deposit which has posted in that account every week without fail for 7 years. The debits were allowed to clear first, each taking a $25 fee with it before the direct deposit was allowed to credit the account.
Again, this is not a regular occurrence as our accounts are usually kept track of pretty well. However as life happens so everyone gets overdrawn from time to time. But boy when we get behind by a single transaction, it snowballs into a nightmare.
The representatives are quick to tell us that it is our own fault and where we bear the blame for being overdrawn it is incredibly clear that the practices at this credit union are designed to capitalize on mistakes to the financial benefit of the credit union.
We seek to be refunded our overdraft fees incurred on the day of the deposit of our paycheck and any other fees incurred throughout this weekend until we can get funds into the account.
We appreciate the opportunity to respond to BBB Case #XXXXXXXX:
Heritage South Community Credit Union does offer a "Discretionary Overdraft Privilege Program" and follows the Best Practices guidelines provided by federal regulators: The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Board), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA), collectively "the Agencies".
We clearly disclose and explain to our members the operation, costs, and limitations of an overdraft protection program to enable responsible use of overdraft protection. Our disclosures are designed to minimize potential consumer confusion and complaints as well as foster good customer relations.
Our discretionary overdraft privilege program is a customer service that *** cover inadvertent consumer overdrafts. We identify for consumers the consequences of extensively using the overdraft protection program. We educate our members on their overdraft protection program's features, costs, and terms, including how to opt out of the service. In communications about overdraft protection programs, we clearly disclose the dollar amount of the fee for each overdraft that *** apply.
We clearly explain to consumers that debit card transactions are processed when the merchant processes them for payment, and that the checks written on the account are posted in the order in which they were written on the day they are received by the Credit Union and processed.
We clearly disclose that overdraft fees *** be imposed on transactions such as ATM withdrawals, debit card transactions, preauthorized automatic debits, telephone-initiated transfers or other electronic transfers, if applicable, to avoid implying that check transactions are the only transactions covered.
We obtain affirmative consent of consumers to receive overdraft protection. At any time, members are permitted to "opt out" of the overdraft privilege program. Members who "opt out" from the program and overdraw their account will experience purchases being declined at point of sale due to insufficient funds in the account or checks being returned to merchants for them to collect from the member.
Our system does not have any "soft post" features. Direct deposit is posted to member accounts based on the date to be paid provided by the payor. Any direct deposits to a member account are posted in accordance with the law, and funds must be made available for withdrawal on any business day by the later of 9 a.m. local time of the branch or the time the credit union's branches open and are available for customer account withdrawals.
Heritage South Community Credit Union strives to provide members financial services that meet or exceed the guidelines and procedures established by the federal regulators referred to in paragraph one of this document. We welcome the opportunity to discuss any other questions you *** have in regards to this matter.
Final Consumer Response
(The consumer indicated he/she DID NOT accept the response from the business.)
It's not the fee structure - it's how they collect those fees by processing debits first (largest to smallest) and then processing credits.
Final Business Response
We appreciate the opportunity to respond again to BBB Case #XXXXXXXX:
We regret that our member has had this misunderstanding about the order items to his account and all members' accounts of the credit union are processed. Perhaps this will help:
1)Debit Card transactions are processed when the merchant processes them for payment. Obviously, the credit union has no control over this timing since it originates with the card processor where the credit union member made their purchase.
2)We do have control over the order that checks post to an account. The board and management of the credit union have deemed the most fair and equitable way to post checks is by check number, which is the order in which they were written. Obviously, this is determined by when the payee presents the check for payment. Since multiple items *** come in per day, the credit union posts in the check number order. We pull these checks once per day in the late afternoon when they are applied to the account. This gives members more time throughout the day to make deposits that are credited to the account at the time the deposit is made in our branches (mobile deposits do not credit immediately).
3)When automated clearing house items are presented for payment (direct deposits and electronic debits other than those initiated with a debit card), we have our system set to post the deposits before the debits.
The person filing this complaint has had this issue addressed in a manner that we would also address for other members who have in the past made every attempt to maintain a positive balance in their accounts. Prior to this complaint, the NSF charges were refunded to this member as a one-time courtesy of our branch manager.
At this moment, we can offer these suggestions since we cannot change our system or policies to accommodate his personal requirements in the future:
1)Our credit union offers a variety of ways to access account history so members can verify if sufficient funds are available to pay debits: a 24/7 automated phone balance inquiry system, online home banking, mobile banking, and text alerts that notify members if an item clears or when a balance drops below a certain amount. We continually try to educate our members on the use of any or all of these services so they are aware of their account balances in order to avoid overdrafts.
2)Our Overdraft Privilege Program is optional for members who qualify. If this member qualifies but chooses to OPT OUT of this program, that would help reduce NSF charges for items that overdraw his account. This means that if the balance in the account will not cover the purchase or debit to the account, the item will be denied and returned to the merchant. The down side to opting out is that some retailers charge much more for a returned check than our current NSF fee.
3)If this member finds these options and our processing procedures to be insufficient for him, we recommend that his banking needs might be better served via another institution who can assure him that his personal account requirements, including when funds are insufficient, will be met.
It is the position of Heritage South Community Credit Union that we have done everything possible to make our clearing processes as fair and equitable for all members. If an overdraft occurs on a member's account due to credit union error, it is and has always been our policy to refund any fees that *** have been incurred by the member.