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How to Turn Savings into Debt in No Time

Eighteen-year-old Daniel Ganziano had a savings account at TCF Bank, but he spent his money. The account eventually only had $4.85 cents left, so Ganziano quit making withdrawals. But the bank didn't.
He had all but forgotten about the account until he received a letter from TCF on Oct. 12 saying six days earlier, it had charged him a $9.95 "monthly maintenance fee" because his account had too little money in it.

The $9.95 charge made his account overdrawn by $5.10, which triggered another fee. At TCF, any account overdrawn by more than $5 is charged a $28-a-day overdraft fee. The net result: Ganziano was $33.10 in the hole.

By then, his nascent savings account was in a downward spiral. At $28 a day, the charges were adding up quickly.

When he and his mother went to the nearest branch that weekend to close the account, they were told they would first have to pay the accumulated fees, which totaled $229.10.

Ganziano's mother tried to get the fees waived, with no luck. So she paid it and asked for a bank supervisor to contact her. A few weeks later, with no call from a supervisor, she told the story to a consumer columnist at the Chicago Tribune. That same day, the bank agreed to refund all the fees. Daniel Ganziano said he learned something from the experience: don't trust banks. Link -via Boing Boing

(Image credit: Flickr user Alan Cleaver)

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I don't understand these people that say "the kid agreed to the terms, what is the problem?" Are these people banking lawyers, or what? The whole reason this event garners so much attention is because any reasonable person would see this as a wrong perpetrated by a big corporation against a child. We all identify with it because many of us have experienced similar situations where a person with some authority (whether it be at a corporation or governmental office) will shrug their shoulders and say "there is nothing I can do about it" as some bureaucracy screws you. The whole point of having a person involved in the process is to inject judgment and humanity in the largely automated process of things like banking
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So he knew what was in his account, knew about the fee, but "forgot". I guess the real lesson here is if you whine enough in public, you can avoid responsibility for your actions.
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Same thing happened to me in college. It was the end of the semester and I emptied out my college bank account and headed home for the summer. Well I neglected to take into account a check I still had outstanding and accumulated overdraft fines everyday for 3 months and when I got back to school found out I owed somwhere in the neighborhood of $3500.

All of these fees are automated these days and the bank personnel have little to do with it.

Luckily for me the teller took pity on me and in a few strokes on the keyboard wiped out my fees. So while these fees are automated the bank can waive them in a few seconds if they aren't d!cks about it.
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hmmm..., the same could be said about health care, which is the way most industrialized countries do it.

Banks have plenty of ways to turn a profit without destroying small depositors. They should have just taken the $4.85 and closed the account.
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