Legal Question in Banking Law in California

Hello,

I have two accounts with Chase Bank (formerly WAMU). The first is a free checking account and the second, a savings account. Both accounts were opened in approximately May of '07. My savings account has had a 0 balance since 2008.

In Nov. 2008, I was laid off by my employer. With the exception of a two month assignment from June through August this year, I have been unemployed and receiving UI benefits.

My question is that each time Chase pays a transaction when my account is overdrawn, I am charged $33 per transaction. The amount of the transaction has no bearing whatsoever on whether or not I am charged $33; for example, if Chase pays my $50 cable tv bill or they pay a $10 Safeway credit card transaction, I am charged $33 for each transaction. On any given day Chase will have charged my account $33 on five occasions.

This has been going on for months. Last Friday, at 9:00 a.m. I deposited via ATM, my $860 State of CA UI check. At the time, I withdrew $120, leaving me with a net deposit of $740. Following my deposit I did not use my card nor make any further transactions.

The following morning, a vendor tried to run a $57 transaction on my ATM card which is linked to my Chase checking account. The transaction was declined. In fact, my account was overdrawn.

Over the months, Chase has literally made thousands of dollars in service fees. To add insult to injury, I receive daily phone calls (including weekends) from Chase Bank asking me why I haven't made a payment on my credit card which had a $350 limit. The majority of the balance on my card is Chase's fees. I want to tell them, I can't make a payment because my money is going to them in service fees.

What recourse if any do I have? I plan on closing my account but think it wise to consult with a lawyer before doing so. I have no intention of depositing my UI check because the funds will disappear immediately.

Thank you.


Asked on 9/22/09, 8:42 pm

1 Answer from Attorneys
Robert F. Cohen Law Office of Robert F. Cohen

Banks have very little oversight to protect the consumer from high fees at the moment. You should review the disclosure that the bank provided you, or get another copy. I have no doubt that the fee structure for overdrafts is contained in that document. You would be wise to close your account and not deposit your UI check in it. You also might contact the State Banking Commission and perhaps your local member of congress to urge legislation if you believe that might be appropriate.

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Answered on 9/23/09, 4:59 am


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