Wachovia’s neat little scam…

When I first switched to Wachovia Bank, I was a happy camper.  I even blogged about it (here and here).

But that was before I’d encountered an ongoing, and doubtless lucrative scam that they run.  Just my opinion of course — freedom of speech & self-expression, not a libelous statement 🙂

Here’s the way it works.  If you deposit cash into your account after 2pm, it won’t clear until the next day.  Yes, cash.  What’s more, they have a nifty system that typically clears debits before it clears credits. Or at least, debits seem to clear at any time of the day whereas credits only clear at certain times.  The same applies to checks, but I guess that’s not quite as unreasonable – I can at least see a rationale there.

But wait, there’s more…

The bill pay system is pretty erratic and poorly linked to the checking account section of the website.  Once payments are scheduled in the billpay system you have no idea (or indication from their system) of when the cash will actually be deducted from your account.

Net effect: if your income and expenses are finely balanced, this double-whammy will guarantee that you routinely go overdrawn.  And as a freelance consultant, things often get stretched a little thin on the cashflow side of things.

Why don’t I have overdraft protection?  Because they won’t approve me for it.  They’ll happily clear $600+ in debits and charge me $400 or more for the privilege, but they won’t approve me for a $500 overdraft facility (and this was well before the current credit crunch).

I finally lost patience with this on a day that I happened to have some free time.  I’ve always found that making a public fuss in an allegedly customer friendly environment can be an effective way to resolve things.  On this occasion I went all the way to the branch manager.

Here’s a summary of the manager’s response:

  1. It’s “the system”. You can deposit cash before 2pm at the counter or by 4pm at an ATM (!?) and it will clear the same day.  However, a large deposit (more than a few hundred) made at an ATM will have a hold placed on it until the deposit is verified.
  2. I should consider opening a savings account to act as my overdraft facility (there’s a small flaw in the logic here, but I’ll let you point that out)

    and my personal favorite:

  3. I should keep a written ledger as well as use their online service.

I can’t wait for Wells Fargo to roll out their systems and fix this…

2 comments for “Wachovia’s neat little scam…

  1. November 14, 2008 at 11:34 pm

    Well, be prepared for Wells to fix it, it will take a long time for banks to change systems. And I’m sure this isn’t high on Wells’ list of things to address at the moment..

    Somewhat unrelated, the interesting thing is that the policies for clearing debits and credits have changed slower than the underlying technology: banks can clear payments much faster than before, and even as the policies have changed a bit, many banks still use the lag and difference as a way to earn a spread.

    At the same time though, what are the policies and how long does it take to clear a deposited check? How different is it than cash?

  2. admin
    November 20, 2008 at 8:54 pm

    Totally agree. When I banked with Wells, an ATM transaction or deposit would show up in the online banking system within 30 minutes and bill pay was tightly integrated with your checking account.

    The absurd thing is that checks clear in the same amount of time as cash, unless the check is over $5k. So deposit cash or check after 2pm and they'll both clear at the same time…

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