View Full Version : Right Of Off-Set (Bank warning)
Ever hear of that? If not, your head might explode. I had a biz account get hit with some overdrafts as $ coming in didn't match debts going out for some fixed costs (web hosting, payment processing fees, etc) and that's my fault for not paying closer attention to that account. Over draft fees are however way out of control these days and a scam like few others. $39 per overdraft, $30 every 4th day the account itself is over draft (they call "extended overdraft" fee) as well as various others that took an entire day to figure and cost a small fortune for what was way out of proportion to the initial overdrafts. Consumer Reports covered some of that BS here (http://www.consumerreports.org/cro/magazine/2012/02/bank-accounts/index.htm).
But that's not even the issue. I paid the fees and a few hours later I noted $500 transferred from my personal checking to the (not linked in any way) biz account. I called them up and asked "WTF?" They told me it was "Right Of Off-Set" and the bank could reach into my personal account without authorization because it (supposedly) already existed via the good old fine print. I'd think it would it would be far more difficult for them to do that with a different bank, so I plan to move personal accounts to a different bank than any biz accounts. I looked it up and yup, here it is:
" Sec. 34.307. RIGHT OF SET-OFF. (a) Except as otherwise provided by the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) or other federal law, a bank has a right of set-off, without further agreement or action, against all accounts owned by a depositor to whom or on whose behalf the bank has made an advance of money by loan, overdraft, or otherwise if the bank has previously disclosed this right to the depositor. If the depositor defaults in the repayment or satisfaction of the obligation, the bank, without notice to or consent of the depositor, may set off or cancel on its books all or part of the accounts owned by the depositor and apply the value of the accounts in payment of and to the extent of the obligation."
If you were as unaware of that above as I was, you may want to look into that. Per usual, banks are screwing us in more ways than we know, until it's too late. What can be done about it? I don't know. but awareness is usually the first place to star before enough people get pissed.
I'm pissed.
Go back to hiding money in the mattress like in the Depression Era?
Sorry to hear that. At the end of the day, banks are going to make money. They write these laws for themselves
Go back to hiding money in the mattress like in the Depression Era?
Sorry to hear that. At the end of the day, banks are going to make money. They write these laws for themselves
We all know what happens to a economy and society if people lose their trust in the banks. Per usual, like the housing bubble and collapse, etc. greed and short shortsightedness will be our downfall from within (ala Rome, et al) vs external threats.
Eurodriver
05-11-16, 17:59
Why are you using a bank?
Credit union, bro.
Why are you using a bank?
Credit union, bro.
That's exactly what I will be doing shortly. Was going to do it anyway, but now it's going to happen faster.
I had this conversation with a friend yesterday. His daughter had her business account and personal accounts at the same credit union. When her business account was overdrawn, the credit union transferred what money was needed to cover the drafts from her personal account.
I suggested she move her personal accounts to another financial institution if she wanted to avoid this in the future.
The mattress idea won't work really well in the future either as the gov moves to be a cashless society.
Then you are forced into the banking system where they can charge new and exciting fees before unheard of.
Then, like Cypress, when things get really out of hand (like 2008) they can remove your assets for a "bail in"
Moose-Knuckle
05-11-16, 18:48
The mattress idea won't work really well in the future either as the gov moves to be a cashless society.
Then you are forced into the banking system where they can charge new and exciting fees before unheard of.
Then, like Cypress, when things get really out of hand (like 2008) they can remove your assets for a "bail in"
Yup.
This is why they want to ban guns so bad. Only when We the People wake up to find their bank accounts, savings accounts, 401ks, IRAs, etc. have been seized by the power drunk oligarchy will they take to the streets.
I am not surprised. Sadly, not much would surprise me with banks, have dealt with enough that damn near expected you to be grateful to be able to deposit your money there and if there is an issue, it has to be your fault, period.
That said, slightly on topic, at my previous bank I had one manager say to me when I mentioned I preferred having cash on me for small purchases and eating out rather than using my card, and was told to my face that cash was very unreliable and that I should have their credit card instead. :suicide: I had to stop myself from replying to the effect that I wasn't sure what third world shithole she came from but this was America, cash talks. I say third world since she had an accent so thick you could cut it with a dull knife. Same bank also tried to convince me, not one, but twice, not to open a fraudulent charge case on a series of charges that were on my card when the info was stolen. Made the mistake of going down to the branch to get the process started and get a temp card, manager was happy to get me the temp card but tried get me to not go through the fraud process and just eat the charges, and after I chewed them out the dumbass in their fraud department tried the same thing. Told them both that once accounts were settled I was going elsewhere. The ****ing manager even had the balls to act shocked when I walked in a couple weeks later and closed all accounts.
I am not surprised. Sadly, not much would surprise me with banks, have dealt with enough that damn near expected you to be grateful to be able to deposit your money there and if there is an issue, it has to be your fault, period.
That said, slightly on topic, at my previous bank I had one manager say to me when I mentioned I preferred having cash on me for small purchases and eating out rather than using my card, and was told to my face that cash was very unreliable and that I should have their credit card instead. :suicide: I had to stop myself from replying to the effect that I wasn't sure what third world shithole she came from but this was America, cash talks. I say third world since she had an accent so thick you could cut it with a dull knife. Same bank also tried to convince me, not one, but twice, not to open a fraudulent charge case on a series of charges that were on my card when the info was stolen. Made the mistake of going down to the branch to get the process started and get a temp card, manager was happy to get me the temp card but tried get me to not go through the fraud process and just eat the charges, and after I chewed them out the dumbass in their fraud department tried the same thing. Told them both that once accounts were settled I was going elsewhere. The ****ing manager even had the balls to act shocked when I walked in a couple weeks later and closed all accounts.
I can say my experience in various third world countries is, cash, especially US greenbacks is king, and cards are often not accepted at all for various reasons.
Generally speaking Banks suck. Have done so since Jesus and will do so till the roaches take over. They were, are and will continue to be money making ventures that own governments, write laws and destroy all those in their way. Their ability to get away with things fluctuates through time, but never in the history of modern man have we been able to shed their influence. Never will. You need as many firewalls between aspects of your life as possible. For now, when it comes to banking you must different institutions for each aspect of your financial life. Sad, but for now its the only way to truly separate your accounts. Soon enough that will end as well.
I can understand how this (right of offset) is new to you since you hadn't experienced it before, but I have worked in and around the industry for 50 years and it has always been there. Read your account agreements! It is also in any loan agreements you sign. And yes, credit unions do it also.
MountainRaven
05-11-16, 20:05
This would explain why the lawyers in my family use one bank for their personal accounts and others for their business (law firm) accounts.
Now I know.
SomeOtherGuy
05-11-16, 20:05
As noted, the right of offset has been around for a while. Question - is your business in your personal name, or as a legally organized business entity like a corporation or LLC? If in your personal name (whether or not you have a d/b/a) then the offset is straightforward. If it's a legally separate entity, they may not have had the right to do it. Basically, they wouldn't have had any right to do so generally, but it wouldn't surprise me if some sneaky bank put a provision saying they could reach anything you had signature authority on, or any entity's account in which they believe you have an interest. That wouldn't necessarily be legal either, but it might be something they would try.
I use a completely unrelated bank for my business vs. the credit unions I use for personal accounts. This is the best way to go. And no, don't trust credit unions not to do this stuff either. I think CUs are generally better than banks, but they're in the same general business and do most of the same general things.
This would explain why the lawyers in my family use one bank for their personal accounts and others for their business (law firm) accounts.
Now I know.
Now I know why I was always told to keep biz and personal accounts in different banks. No one explained why...
Eurodriver
05-11-16, 20:13
I can understand how this (right of offset) is new to you since you hadn't experienced it before, but I have worked in and around the industry for 50 years and it has always been there. Read your account agreements! It is also in any loan agreements you sign. And yes, credit unions do it also.
No doubt, but a credit union treats you like a human being. Banks genuinely don't give a **** about you unless you're an illegal immigrant at BoA.
I know so many people who don't even carry cash. I'm all like babe, what are you gonna do if there's no power?
"Won't happen"
:confused:
No doubt, but a credit union treats you like a human being. Banks genuinely don't give a **** about you unless you're an illegal immigrant at BoA.
I know so many people who don't even carry cash. I'm all like babe, what are you gonna do if there's no power?
"Won't happen"
:confused:
I hear that. I keep a cash reserve on hand for emergencies, like no power, needing to go someplace quickly, disasters, or the real emergencies when you need cash on hand stat! Cheap used guns and accessories! I mean what are you going to do when all you have is plastic and that $300 Beretta 9mm, , $280 Colt .38, or $500 ACOG cross your path for cash on the spot and you don't have it? How would you live with yourself? I wouldn't know, all those are in my safe because I keep cash on hand. :cool:
Ever hear of that? If not, your head might explode. I had a biz account get hit with some overdrafts as $ coming in didn't match debts going out for some fixed costs (web hosting, payment processing fees, etc) and that's my fault for not paying closer attention to that account. Over draft fees are however way out of control these days and a scam like few others. $39 per overdraft, $30 every 4th day the account itself is over draft (they call "extended overdraft" fee) as well as various others that took an entire day to figure and cost a small fortune for what was way out of proportion to the initial overdrafts. Consumer Reports covered some of that BS here (http://www.consumerreports.org/cro/magazine/2012/02/bank-accounts/index.htm).
But that's not even the issue. I paid the fees and a few hours later I noted $500 transferred from my personal checking to the (not linked in any way) biz account. I called them up and asked "WTF?" They told me it was "Right Of Off-Set" and the bank could reach into my personal account without authorization because it (supposedly) already existed via the good old fine print. I'd think it would it would be far more difficult for them to do that with a different bank, so I plan to move personal accounts to a different bank than any biz accounts. I looked it up and yup, here it is:
" Sec. 34.307. RIGHT OF SET-OFF. (a) Except as otherwise provided by the Truth in Lending Act (15 U.S.C. Section 1601 et seq.) or other federal law, a bank has a right of set-off, without further agreement or action, against all accounts owned by a depositor to whom or on whose behalf the bank has made an advance of money by loan, overdraft, or otherwise if the bank has previously disclosed this right to the depositor. If the depositor defaults in the repayment or satisfaction of the obligation, the bank, without notice to or consent of the depositor, may set off or cancel on its books all or part of the accounts owned by the depositor and apply the value of the accounts in payment of and to the extent of the obligation."
If you were as unaware of that above as I was, you may want to look into that. Per usual, banks are screwing us in more ways than we know, until it's too late. What can be done about it? I don't know. but awareness is usually the first place to star before enough people get pissed.
I'm pissed.
First things first, I work in finance and it should be made clear that an overdraft is essentially a debt. And Banks do have a right to collect payment on your debt. However, the overdraft structure you described is VERY aggressive. As a general rule, it's a good idea to keep personal and business accounts separate, at different banks. Off-set only applies to accounts held with the same institution. I've also never seen a bank exercise off-set for an overdraft unless it was for 30 days or more. More often, off-set is utilized to collect a past due payment in the event of default on a larger loan relationship. You've got a pretty crappy bank, for sure. A decent bank would have contacted you in an effort to allow you to resolve the issue beforehand.
On the other hand, you are responsible for keeping up with your account. And you would have been equally pissed if they returned your business check to the presenting bank as an NSF, causing professional embarrassment to you and your company. They basically covered the bad check for you, making a short term loan to you in the interim.
Folks are quick to say the banks are screwing them and they're out to get you. But in this case, my response would be, don't write bad checks and you won't have a problem.
FlyingHunter
05-11-16, 20:28
"When cash is outlawed, only outlaws will have cash."
An article from ZeroHedge, Feb., 2016
http://www.zerohedge.com/news/2016-02-19/when-cash-outlawed-only-outlaws-will-have-cash
The best quote in the article is: "The Deep State wants you to use money it can easily control, tax, and confiscate. And paper currency is getting in its way."
I have asked credit unions and credit card companies to waive fees I get charged if I do something stupid. They have always done so. Usually they say.... "Yes, I can waive that fee for you since you are a long term customer and typically pay your balances on time" ... it's like they read it off an "allow if" list.
Will, if I were you, I would call your bank back and just say.... you did some research, realize you did wrong but had no idea the fees could mount up so fast... can you please waive the fees this once since I have been such a good customer. there is a very good chance they will say yes.
.46caliber
05-11-16, 21:26
cash was very unreliable
Wait. What?
No doubt, i was chatting up the girls at the bank about the new "chip cards" and if they are really effective in limiting fraud.
Especially when large companies like Target etc routinely store card data for God knows what reason and hackers just break in and steal thousands of CC numbers at a time.
Just for fun, I floated that we should just go back to using cash that can't be stolen by hackers and that surely they would support such an obvious solution to the rampant CC theft and fraud that we have today.
I was quite surprised when they completely disagreed and said cash was "not secure" and easily counterfeited by "washing" low denomination bills and reprinting higher values.
While technically true, I think they've drunk too much company Kool Aid and underestimated the relative magnitudes of both problems.
Once again, critical thinking goes out the window.
Oh well, at least the one girl conceal carries...
There is a trend with banks to limit the distribution of Benjamins. My CU will mostly only let you have $50's. Why? Help curb illicit trade.
Eurodriver
05-12-16, 05:28
There is a trend with banks to limit the distribution of Benjamins. My CU will mostly only let you have $50's. Why? Help curb illicit trade.
That's a separate issue. I made a thread here about a friend who's grandfather left him like legit Many tens of thousands of dollars in cash.
He had to jump through so many hoops to deposit that. Filled out IRS forms, the bank manager even ended up filling out a suspicious transaction form that got LE involved.
When I used to be at a bank they had a $1,000 withdrawal limit daily. That's not for the atm either. You simply couldn't withdraw more than that per day, under any circumstances, if you didn't have a business account!!
That's a separate issue. I made a thread here about a friend who's grandfather left him like legit Many tens of thousands of dollars in cash.
He had to jump through so many hoops to deposit that. Filled out IRS forms, the bank manager even ended up filling out a suspicious transaction form that got LE involved.
When I used to be at a bank they had a $1,000 withdrawal limit daily. That's not for the atm either. You simply couldn't withdraw more than that per day, under any circumstances, if you didn't have a business account!!
To what extent was LE involved? Was it just an SAR that goes to FinCen or was he actually contacted by law enforcement?
No doubt, but a credit union treats you like a human being.
YMMV - My worst experience with a financial institution ever was with a CU, and I have had generally good experiences with commercial banks.
Eurodriver
05-12-16, 06:54
To what extent was LE involved? Was it just an SAR that goes to FinCen or was he actually contacted by law enforcement?
Just the SAR. Not contacted, as you predicted IIRC. Still made him feel like a criminal though when the branch manager was interrogating him.
I understand AML regulations put a lot of pressure on the banks, so it's not necessarily "their" fault, but why do we live in a society where carrying cash = criminal activity?
Read any news article
"Malik was found under some trees with $2,500 in cash" = guilty.
Outlander Systems
05-12-16, 07:08
Throw Civil Asset Forfeiture in there.
https://www.washingtonpost.com/news/wonk/wp/2016/04/25/how-oklahoma-cops-took-53000-from-a-burmese-christian-band-a-church-in-omaha-and-an-orphanage-in-thailand/
War on cash, homies.
Throw Civil Asset Forfeiture in there.
CAF's are way worse, IMO.
Just the SAR. Not contacted, as you predicted IIRC. Still made him feel like a criminal though when the branch manager was interrogating him.
I understand AML regulations put a lot of pressure on the banks, so it's not necessarily "their" fault, but why do we live in a society where carrying cash = criminal activity?
Read any news article
"Malik was found under some trees with $2,500 in cash" = guilty.
OK. You had me a little worried. What's interesting, is that the bank is not supposed to discuss the SAR with the customer. Meaning, they are not supposed to interrogate anyone and the customer is essentially unaware of the report. They can ask conversational questions, glean what they can and report it if deemed necessary. The SAR is a step down from the CTR, but was implemented a long time ago to detect activities falling below the CTR limits or attempts to avoid them. The CTR and SAR were already in place before the PATRIOT ACT.
The SAR and CTRs are submitted to FinCen, not directly to LE. It's FinCen's job to sort through thousands and thousands of these reports every day. They are looking for connections and patterns of atypical / criminal-like behavior. Why? Mainly to detect money laundering by cartels, terrorists and organized crime. But they look just like you and me, so everyone is a suspect.
I suspect that your friend won't hear another thing about it. And even if he did, he's done nothing wrong and has nothing to fear. It sucks that this is our reality. But in today's world, "follow the money" is still one of the strongest tools available to law enforcement.
One other interesting note, before anyone blames the bank or its employees, there are stiff civil and criminal penalties for the bank and the individual employees if they do not abide by the BSA requirements. And they are retrained annually, as a constant reminder of this fact. It's beaten into them starting on day one of training.
Eurodriver
05-12-16, 07:31
Well, to be frank, he was nailing one of the tellers a few years ago and she told him about it. The manager didn't just say "Hey bro, we're filing this SAR on you" ;) In the last thread on this, your knowledge of banking is really valuable. Thanks for bringing facts and info to threads like these.
Sorry for the derail, Will.
Well, to be frank, he was nailing one of the tellers a few years ago and she told him about it. The manager didn't just say "Hey bro, we're filing this SAR on you" ;) In the last thread on this, your knowledge of banking is really valuable. Thanks for bringing facts and info to threads like these.
Sorry for the derail, Will.
Lol! Now that makes a little more sense!
Outlander Systems
05-12-16, 08:13
For sureskis...scary shit.
CAF's are way worse, IMO.
Wait. What?
Pretty much. But, that is literally what came out of her mouth, "Cash is very unreliable." Not really sure what else I can add to that.
Why are you using a bank?
Credit union, bro.
Boom. Truth. I love our credit union.
Why are you using a bank?
Credit union, bro.
Here, here.
My credit union allows us to tie our checking account to a line of credit (which they set up for me when I started a car loan). When we overdraft, it just pulls from the LOC. No fees (other than a small interest charge), no penalties, no fuss, no muss. My wife and I were on vacation once and forgot to transfer money around to cover some of our automatic payments, including the house. The LOC covered almost $5k in overdrafts for about $3 in interest.
Screw banks.
NASA has a CU and I'm looking at them as I'd like to support NASA. Penfed seems another. Seems well rated from what I'm reading.
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