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Comment by Ozzie_osman | Hacker News Reader

Yea. For people who aren't familiar with this, the bank will reorder your transactions and batch them to do the biggest one first. Then you get charged an overdraft fee per transaction after that. If they did the small ones first, you may not go into overdraft until the last big one... So you'd pay one fee. Do the largest first, then each small one causes a fee.

Highway robbery.

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In 2004 I was traveling around Europe as a 20 year old. Spent my debit account down to my last $20. I had a flight from Barcelona back to Boise and the airline had supposedly issued a paper ticket, not an e-ticket. Long story short, if I couldn’t produce the paper ticket, my flight was going to leave without me. I didn’t have a credit card and I knew I was out of money but I said what the hell, try my debit card to purchase a new flight. Lo and behold, it went through! I came home and a week later my account was -$5,500. Wells Fargo had taken the last charge, the $900 flight, reordered it and I accumulated $4,600 in overdraft fees. I’ve never been so angry in my life. They did not fix the charges, and I got bailed out by my mom. I plead my case over and over but everyone, including my mom, just drew it up as an non-responsible college kid.

Every time I tell this story it makes my blood boil.

How in the hell they calculated so much overdraft fees? They charge 500% overdraft?

Poster probably had a series of small transactions from travelling ($5,12$,$13 etc). The bank moved the $900 to the front of the payment queue, and then every one of the smaller transactions cops the fee.

It wasn't 500% of 900, it was the sum of the overdrafts on all the previous transactions.

For ~4k-ish of overdraft fees assuming ~$40 per single overdraft, they'd have to have hundred-ish transactions, sounds like a lot transactions (or the overdraft fees getting exponentially bigger with each one?)

I was tooling around Europe for a few weeks before I left and was using my debit card everywhere. 1 euro coffee, beer here, beer there, it all added up. For whatever reason, the overseas transactions didn't clear as fast as a stateside one usually did. I imagine it was like a weeks worth of transactions. 12/day isn't really crazy when traveling but it's been so long, the only detail I really remember was the final blow.

Ha I had the exact same experience with Wachovia bank in New York City once and basically their argument was on the lines of “The highest value transaction was probably the most important for you so we ordered it by price so that your most important transactions go through first”.

In a way though I feel like the American system is set up to traumatize you for being poor so much that you develop the thirst to become a millionaire one day when these things don’t affect you.

or to keep you vulnerable/exploitable and maybe accomplice higher up in the ladder

The argument, which I do not buy as sufficient but add here for completeness, is that it’s better for your large purchases (ie rent) to clear before your $10 lunch, etc.

But re-ordering all of your deposits so they were applied after your debits was certainly not better for any purchases.

That's only true if you do not have overdraft, and therefore some transactions will be denied.

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