subject: Tips on How to Get a Refund on an Overdraft Charge [print this page] Tips on How to Get a Refund on an Overdraft Charge
Getting an overdraft charge can be a painful experience. It is a bit like getting a speeding ticket: you know you did something wrong, but you feel that the punishment somehow doesn't fit the crime. You resent the other party a bit, but you are also mad at yourself for letting it happen in the first place.
An overdraft, of course, is something that occurs any time your transaction amount (check, debit, credit card attached to a checking account) exceeds the current balance in the account. The tricky part about overdrafts is that you can get multiple overdrafts - even in a single day.
For example, let's say you have $100 in your account but think you have more than that in the account. Pretend that that same day you make three small charges for $5 each (let's say you buy a cup of coffee, a bagel and a magazine). Then, that same day, you authorize a charge on your debit card for $110 for a pair of new shoes, thinking your balance will cover it.
Technically, this situation will amount to four overdrafts for your account - potentially leading to over $100 in overdraft fees. The sneaky part is that your bank may perform a practice called transaction stacking, whereby they purposefully process the larger charge first. Once you are overdrawn on the first, larger charge, they can then "get you" (charge you) for the other three, even though they are only $5 each, since by that point you are now over your limit.
Sound familiar? This kind of thing happens every day to sensible checking account holders everywhere. In fact, charging overdraft fees is a big business: the banking industry makes about $25 billion (with a "b") per year in overdraft fees alone. They are in no hurry to end this very lucrative overdraft fee practice anytime soon.
(note: there are some banks that never charge overdraft fees. Check out: http://www.escape-overdraft-fees.com/ for more information).
So, how to get a refund on an overdraft charge you have incurred? There is no guarantee you will get a refund, of course, but you can always try the following:
1. Call the bank and explain what happened. Usually, your reasoning has to be a bit better than just saying, "I made a mistake." But, you could explain that you believed the account was well-funded and then made charges against the account. Innocent mistake.
2. Also: many online banking statements are fairly hard to decipher - even for people who consider themselves "numbers types." If you are new to your bank, you may be able to explain to the customer service person that you just didn't understand that certain pending transactions were going to have an effect on your balance with the timing that actually occurred.
That's about it. Of course, if you feel there really was an error made on the part of the bank that caused the overdraft to occur, call first. If that doesn't work, write a letter to the bank's national customer service office (found on their web site), explaining the situation. Make sure to provide as many details as possible about the related transactions. The more facts such as dates, transaction/payee names, and dollar amounts that you can give them, the better. It may even help to print out your online statement and/or photocopy any other relevant materials and include with your letter.
At the end of the day, it will be up to the bank as to whether they will give you a refund for the overdraft already charged. But, the more quickly you respond to an overdraft you notice, the better the chances you will have of getting it cleared.
