So, we have been working on getting our system to not charge an overdraft fee on a POS purchase that was approved on a positive balance but later cleared on a negative balance. We made some changes in our system and ran the changes last night in report mode only and I now see what I feel like is another issue that is happening due to the change we put in place.

Example: Customer has an item pending on their account that will overdraw them. Along with this pending item, there are 3 other charges approved (the system is looking at the balance that includes the pending item - so it's negative), however, these 3 items clear the account prior to the original pending item, so they clear against a positive balance. But because of this change we made to correct the original issue stated above, the system now wants to charge a fee for each of these 3 items because the balance they were approved against was negative.

I say No Way......as a customer will look at this on their statement and want to know why they were charged a fee. Another employee said to me "but they knew when they made the purchase that they didn't have the money". I still don't think we want to charge fees this way.

Anyone else banging their heads against the wall trying to make these OD fees work correctly so we don't get hit by examiners?? Am I thinking correctly in saying we don't want fees to charge this way either?? Help!!

Since many of the major players in the industry are starting to totally eliminate all OD fees and this is going to put you at a distinct competitive disadvantage, why do you not just turn off OD fees for all POS transactions and just rely on your approval system?

When you say "rely on your approval system", what do you mean? Are you saying leave our ODP program in place but not allow OD's on any card transactions (one time POS & ATM)? So basically they are either approved or declined depending on the balance in the account? And if one does sneak through then there simply isn't a fee? I'm sorry if these are stupid questions....I'm just trying to understand.

I would love to turn off OD fees for POS transactions, but I'm pretty sure it wouldn't go over well with mgmt.

Unless they have opted-in to both your OD program and one time POS transactions, you cannot charge regardless of whether one slips through or not. I am not sure why programming just to take into consideration the OD program amount you are offering over ledger balance would be that difficult.

Well...you wouldn't think it would be but apparently it's very difficult or we just aren't understanding the technical side of things. We were previously using available balance but with this change it is now looking at "net available balance" which includes all things pending apparently.

I don't understand the programming side of things, that's just not my area, all I can do is tell them what we want to happen. But we have been working on this forever and a day, and we still haven't gotten it right.

I just want to bang my head on the wall.....

Has anyone reached out to your deposit system's software provider? If you are struggling with this, then all of their other clients must be having the same problem. Are there any peer banks using the same system that you can reach out too?

We have been working with our provider on this and apparently there was a fix for the original issue (funds being approved on a positive balance but clearing on a negative balance being charged a fee). Apparently this is the fix we put in place and ran in report mode only. But like I said - now I'm seeing items being charged a fee that cleared the account on a positive balance but was approved against a negative balance because of pending items.

I believe we are going to have to reach back out to our Core processor and see if we can correct this, because I don't think we want this happening either. I was told we can't have it both ways by my IT department. Either we set it up to look at the actual balance, which includes all items pending, or we don't.

The problem with that is....items don't always clear in the same order they are approved.

Honestly - I would be happy to get rid of the whole ODP program all together! I'm all for helping people when they need it, but this is a total pain in the you know what! (sorry)

I will post in the private forum to see if anyone is using the same processor as us.

I will add in a reminder to verify what your policy says. Obviously I'm not familiar with yours, but ensure the changes you're considering agree with what is disclosed. Some banks will specify a payment order, the number of fees imposed in a day, a de minimis which triggers a fee, etc.

When you try to explain how this one item triggered multiple other fees we are back into "the old days" and you open yourself to criticism and complaints. My point is, ensure what is disclosed agrees with actual practice and that agrees with approved procedures and disclosures.

At times like this I often recall one of my bank presidents saying, "if it were easy we'd have monkeys doing it."

Thanks Andy for the reminder!

Yes, I have been reviewing the policy also. I agree with the bank presidents comment - however - some days I feel like a monkey running around here trying to figure things out and keep them straight in my head! 😉