ATM Card Asshattery

[Ghel]

I have a thread going for this week, but I thought this deserved its own thread.

A woman who has a savings account with us dropped off an application for an ATM card. The application listed her and her boyfriend (I guess - they wrote down different addresses but the same phone number). Her boyfriend is not on her savings account. I looked up his name and found a charged-off loan from 2001. He still owes us over $600.00.

The phone number listed on the application is not the phone number on her account. The prefix tells me that it's located in the same town as the bank, but her address is the next town over. So I did a reverse lookup on the phone number; it's unlisted. What a surprise.

She comes by and I tell her that he's not on her savings account. She asks to add him. I can't tell her the details (due to privacy laws), but I say that we will not be opening any type of account with his name on it. But she can do a new app just for herself. Of course, I worry that as soon as she gets the ATM card, she'll just give it to him.

So she drops off a new app with just her on it. She lists the hospital as her employer. She must have just started working there, because all the deposits going into her account before today are from unemployment.

I pull her credit report, as we do with all ATM and debit card applications. Her credit score is terrible. We normally look for 650 or higher. Hers was 580. Looking further, I see that she has 6 unpaid collection items, and the only open account is her mortgage, which is in foreclosure. Several of the closed accounts are marked "charged off" or "collection account."

Naturally, we didn't give her an ATM card. She'll get a notice in the mail saying that, because of her credit, we couldn't approve her application. I just can't find it in me to feel sorry for her.

[thelong1]

We have basically the same guidelines at the credit union I work at. Hopefully she won't turn into an SC when she receives the denial letter. Sometimes it's hard for people to understand a certain level of creditworthyness is required just for a simple ATM card and especially for a debit card. The only information we have to go off is their credit report and if its a proven track record on not maintaining their financial responsibilities what else are we supposed to do?

[Amina516]

If by having an ATM card, she'd only drawing on what funds she already has in the bank, why is there a credit approval process? I just assumed that you got an ATM card with a checking account.

I was completely expecting her to pitch a fit when you told her her b/f could not be on the application though.

[thelong1]

Believe it or not but a lot of people commit ATM fraud by depositing bogus items and/or nothing at all. Depending on the hold policy the funds could be available before we have a chance to audit the ATM and go through all the deposits. If it's a bogus check we won't find out until it's returned from the other financial institution, which can take some time and leave them with a negative balance in their account, which is basically stealing from the bank. Its basically a faith based system. They put their faith into the bank in that they put money in their account and it will be there when they want to withdraw and we put faith in them that the money they put into the account is actual legitimate funds.

[Ghel]

Not to mention that we only send ATM balance updates twice a day. If the customer makes a withdrawal in the bank, then goes immediately to the ATM, they could withdraw the funds twice. Or if a check clears the same day as their ATM withdrawal, they could be overdrawn, too. People who don't bother to keep track of their balances can easily run up hundreds of dollars of overdrafts that way.

Debit cards are even worse because the purchase limit is higher and transactions frequently don't clear for 2-3 days. Also, our debit cards are Visa branded, so the customer has very little liability. They can claim that they didn't authorize the purchase, and the bank is stuck for the money.

I expect her to pitch a fit when she gets the adverse action in the mail.

[Imogene]

I expect her to pitch a fit when she gets the adverse action in the mail.

I was wondering...

[bainsidhe]

When I first started reading this post and you mentioned the boyfriend owing $600, all I could think was "Well, now you'll just get the money back from this lady right out of her account". I know it doesn't really work like that.

I have a hard time feeling sorry for this woman as well, but I do hope she starts hanging out with better people in the future. My sis has a lot of her own issues, which she brought on herself. And it's a lot harder to dig yourself out when you're surrounded by people with the exact same problems.

[Sacknahalf05]

No offense to anyone that's posted, but I think I'm gonna play a lil "devil's advocate" here.

I'm failing to see any major suck here. As of yet, there's been no entitlement, no screaming, no tantrum. From what I see, it's someone coming off unemployment, trying to get an ATM card, and just maybe dig herself out of a hole (and save her house!). Sure, the situation with the b/f having an unpaid loan is kinda sucky, but who's to say she even knew about that when they signed up for the ATM card?

Now, I'll not disagree on the bank's rules. They are there for a very good reason, and you were well within your rights to deny the application. You can't use your heart over a credit score when you work at a bank, lol!

Sorry, guys. I hate disagreeing with anyone, 'specially since I wasn't there when it happened. But as someone laid off recently, and a single parent to boot, I know what the pressures and stresses are to keep up with all your bills on half your salary. Just hit a little close to home, that's all.

[Ghel]

I'm failing to see any major suck here.

It's not any one major thing. It's a lot of little sucky things. On the woman's part, she didn't know who was on her savings account. Instead of coming into the bank to apply for her ATM card, she just dropped it off at the drive thru (both times). She may have just started working at the hospital, but she has plenty of time to go through our drive thru several times in one day. Each of the collection items was for a check she wrote (on an account at another bank) that bounced. Somebody who can't keep track of her account balance has no business with an ATM card. She should know better.

On the boyfriend's part, I'm sure he hasn't told her that he has a loan with us that we're still trying to collect after 8 years. And the reason he had the loan to begin with is that a transposition made it so a check was deposited into his checking account instead of someone else's. When he saw the balance on his ATM card, he withdrew the money and spent it. So when we tried to get it back from him, he didn't have it. Then we (very nicely, I think) set up a loan for him so that he could pay it back over time. And then, he never did.

I certainly understand having very little money and trying to pay all your bills with it. I'm in the same boat. But I certainly wouldn't be asking for an additional way to access my money or even applying for anything that requires a credit check right now. I know my credit's in the crapper, and she should, too.

[friendofjimmyk]

If by having an ATM card, she'd only drawing on what funds she already has in the bank, why is there a credit approval process? I just assumed that you got an ATM card with a checking account.

That's what I thought too. I had extremly bad credit.... I mean VERY, VERY, VERY BAD credit when I got an account with my current bank. However, I got an ATM card - it's a Visa debit card. I thought that since those cards are tied to an actual account...you got them regardless of credit.

[Sacknahalf05]

Yeah, now I get it. Once the story evolves, I definitely see the suck.

And I also wasn't aware there was a credit process on ATM cards until you explained it. Visa Debit/Check cards, sure. But I didn't know they use the same policies for ATM cards. Thanks for clarifying that.

[prb]

And I also wasn't aware there was a credit process on ATM cards until you explained it. Visa Debit/Check cards, sure. But I didn't know they use the same policies for ATM cards. Thanks for clarifying that.

Even still, banks could learn from the Canadian banking system...

[CrazedClerkthe2nd]

Even still, banks could learn from the Canadian banking system...

Amen to that!

As a canadian now living in the U.S., I got totally confused by the American Debit/Credit system for quite awhile.

[bean]

That's what I thought too. I had extremly bad credit.... I mean VERY, VERY, VERY BAD credit when I got an account with my current bank. However, I got an ATM card - it's a Visa debit card. I thought that since those cards are tied to an actual account...you got them regardless of credit.

My credit would actually improve if I filed bankruptcy - which I may do soon. Over 100k in debt (most of it medical). My credit score is below 500.

I have 3 debit cards (all Visa I think) - 2 for checking accounts at Wachovia, 1 for a checking account that I've never even used at Wamu. None of them checked my credit, or even checked ChexSystems (I owe Comerica $150 and it's on ChexSystems - they flat out told me they wouldn't remove the entry even if I paid it, so I never paid it).

I don't get why banks still tie a debit card to your credit score - some banks will let you overdraw the account with it unless you specifically ask them to turn that "feature" off (like I had to do with Wachovia). I found out the hard way that even if I was overdrawn it would still approve until I called them basically going WTF and they removed said "feature".

[Ghel]

Even still, banks could learn from the Canadian banking system...

What's so different about the Canadian banking system?

...ChexSystems (I owe Comerica $150 and it's on ChexSystems - they flat out told me they wouldn't remove the entry even if I paid it, so I never paid it).

History drops off ChexSystems after 5 years, whether you pay it or not. I know that's a long time to wait, but it's less time than having things drop off your credit report.

I don't get why banks still tie a debit card to your credit score - some banks will let you overdraw the account with it unless you specifically ask them to turn that "feature" off...

I don't know if it works differently at other banks, but with us, It's not a matter of "letting" someone overdraw their checking account. It's just a matter of when things clear, as I said above. If someone overdraws and we can return the item, we will. (Unless there's extenuating circumstances, of course.)

I know a lot of banks have an overdraft product where they'll let you overdraw your account a certain amount, but they usually charge hefty fees with it. Our overdraft product doesn't work that way. It's actually a line of credit tied to your checking account that advances if you overdraw. Then you're charged interest on the overdraft balance. Of course, being a credit product, we check credit reports for those, too.