Sovereign Bank Complaint - Sovereign Will Let You Overdraft Your Life Away
On April 5, 2010, I cashed a live check from my employer at a Sovereign ATM in Boston. The check was for $884, and usually the Sovereign ATM statements tell you both your actual balance, and your available balance, which it did.
I then went home to my sister's for Easter weekend and made several purchases well under $884, not realizing that it would take three business days for my check to clear. (In the past, I had had direct deposit to my checking account, but with my new job, the direct deposit hasn't kicked in yet.)
The following week I was overdrawn in my account, but couldn't figure out why I was missing $280. When I received my monthly statement on my checking account, it showed that I was charged an Unavailable Funds Fee of $35 EIGHT times for purchases I had made after depositing my live check.
I went to a Sovereign and explained that I had clearly made a mistake and wouldn't have intentionally overdrawn my account so much. (Who would?) I also said that I had been with the bank for many years and had been a loyal customer. Since I had cashed a check into my account that was on record, could they refund my fees?
The branch manager I spoke with said that Sovereign never returns bank fees unless it is an error on their part. Then she told me she would "do something I never do" (I'm sure that's part of her script with customers) and return HALF of what I had lost--$140. I agreed to this although I said it was not the best outcome.
I then asked if I could have the overdraft mechanism on my account stopped so that I would simply be denied at a store if there was no money in my account to cover the purchase. The branch manager seemed reluctant to do this and instead offered to open a line of credit for me, where the overdraft fee would only be $10. I agreed, pending approval of my credit, which will take up to a week. And now I am having buyer's remorse on that, because I'm not entirely sure this "line of credit" will ultimately benefit me or Sovereign more. What do you think?
Although I clearly made a mistake when I deposited a live check that took longer to clear than I anticipated, what irks me is that Sovereign ALLOWED me to rack up EIGHT overdraft penalties. What if I had made 20 small purchases before I knew what was happening?
Clearly, Sovereign makes a good income stream on its fees. But what they should do is have a limit to how many times a customer can overdraw their account before their card stops working. If I had been denied at a register while attempting to make my fifth purchase, that would have signaled to me that I had a problem with my account.
It seems to me that Sovereign is in the business of making money and not protecting its customers if it can make buck$ off of them.