Predatory Practice at Philadelphia Federal Credit Union

[BradyDale]

So, we expect big banks to charge high fees. They love to screw over people lending them their paychecks to invest. But credit unions?

Credit Unions are supposed to be a better deal, right?

I have had a pretty OK experience with the Philadelphia Federal Credit Union since I came to Philadelphia. It's not quite the credit Union I grew up in in Kansas where all the tellers knew me on site and knew who my mom was to, but it's been okay. I recently got nailed for a couple fees from them that seem pretty ridiculous.

I confess: on the face of it, it's all my fault. The rub is two-fold tho. 1) the money was there and 2) it's a pretty big charge for what comes down to an honest mistake.

So, here's the deal, my employer still thinks it's 1992, so we get paychecks. We don't do direct deposit. So I have to go to the bank and fill out a form to make my bank deposit. This last time I went, I apparently accidentally wrote that I wanted to deposit all the money into my Savings and not my checking.

When I got home, I went into my ING Direct account. I keep two accounts in there that I set aside money in and pay bills out of, because all that works easier out of ING. So every time I get a paycheck I do two withdrawals from my PFCU savings for most of the money. Whatever I leave in PFCU is just my spending money, for the most part.

Because I hadn't actually made a deposit into my Checking, I'd made it into my Savings, there was hardly any money in my Checking. There was plenty in Savings, but not my Checking.

At the Credit Union I grew up in, they would have just rolled it over, but instead I got two charges for $25 apiece ($50 isn't going to kill me. I'll be fine, but I know there are real people that this would really hurt -- and no doubt it has).

So I find this out the next day and moved the money over to my Checking. When I looked at my ING Account later, one of the two transactions had actually gone thru.

PFCU says that ING tried to withdraw those funds again, so that's why it worked later. They did not, however, do this for the other withdrawal.

Yet I still have two charges for $25.

All the while, there's plenty of money in my account to cover all of this. I just put a number down on the wrong line of a stupid form.

It's exactly the way Big Banks find ways to nail customers for more money. Look for some little mistake people make sometimes. Charge them for it. Even if there's an easy fix. Even if there's a way you could let them off without costing anyone anything (transfer it from my Savings, for example), they hide behind rules and policies.

I've since checked. Even tho I know people who have banks and credit unions that will use a Savings account as a back-up to Checking, PFCU has an explicit policy against it. In other words, they have decided that they want to set this trap because they know some people will occasionally make mistakes like the one I made.

But at the end of the day, PFCU just made $50 without any work, without making the world any better and definitely without looking out for the best interests of their customers.

We expect better of Credit Unions. That's all I'm saying.

[toxigal]

So, we expect big banks to charge high fees. They love to screw over people lending them their paychecks to invest. But credit unions?

Credit Unions are supposed to be a better deal, right?

I have had a pretty OK experience with the Philadelphia Federal Credit Union since I came to Philadelphia. It's not quite the credit Union I grew up in in Kansas where all the tellers knew me on site and knew who my mom was to, but it's been okay. I recently got nailed for a couple fees from them that seem pretty ridiculous.

I confess: on the face of it, it's all my fault. The rub is two-fold tho. 1) the money was there and 2) it's a pretty big charge for what comes down to an honest mistake.

So, here's the deal, my employer still thinks it's 1992, so we get paychecks. We don't do direct deposit. So I have to go to the bank and fill out a form to make my bank deposit. This last time I went, I apparently accidentally wrote that I wanted to deposit all the money into my Savings and not my checking.

When I got home, I went into my ING Direct account. I keep two accounts in there that I set aside money in and pay bills out of, because all that works easier out of ING. So every time I get a paycheck I do two withdrawals from my PFCU savings for most of the money. Whatever I leave in PFCU is just my spending money, for the most part.

Because I hadn't actually made a deposit into my Checking, I'd made it into my Savings, there was hardly any money in my Checking. There was plenty in Savings, but not my Checking.

At the Credit Union I grew up in, they would have just rolled it over, but instead I got two charges for $25 apiece ($50 isn't going to kill me. I'll be fine, but I know there are real people that this would really hurt -- and no doubt it has).

So I find this out the next day and moved the money over to my Checking. When I looked at my ING Account later, one of the two transactions had actually gone thru.

PFCU says that ING tried to withdraw those funds again, so that's why it worked later. They did not, however, do this for the other withdrawal.

Yet I still have two charges for $25.

All the while, there's plenty of money in my account to cover all of this. I just put a number down on the wrong line of a stupid form.

It's exactly the way Big Banks find ways to nail customers for more money. Look for some little mistake people make sometimes. Charge them for it. Even if there's an easy fix. Even if there's a way you could let them off without costing anyone anything (transfer it from my Savings, for example), they hide behind rules and policies.

I've since checked. Even tho I know people who have banks and credit unions that will use a Savings account as a back-up to Checking, PFCU has an explicit policy against it. In other words, they have decided that they want to set this trap because they know some people will occasionally make mistakes like the one I made.

But at the end of the day, PFCU just made $50 without any work, without making the world any better and definitely without looking out for the best interests of their customers.

We expect better of Credit Unions. That's all I'm saying.

do you have it set up so that your savings account can be used as overdraft protection on your checking account? if not, the bank absolutely should not just decide to move money from one account to another!

[gren]

I think part of it is low interest rates make it hard to support their physical infrastructure without getting money somehow. I'll agree that fees like that are pretty annoying--especially the double charge. You can always ask them to waive the fees. Of course, that probably won't change how you think about them.

[Dayman]

I've been with PFCU for five years or so now - I've had to use the overdraft protection once, there is even a grace period of 24 hours on it if you transfer the money in from your savings in time. Maybe you can work them down to just $25 - if you manage to sit down with them they may very well waive the fee since this was a first-time honest mistake.

I would not call this predatory practice though. The topic title is a bit of hyperbole if you ask me.

[toxigal]

also, on overdraft. it's possible that at your old bank you had overdraft protection and didn't even know it because it was an "opt-out" issue. it was standard to give it to people and they had to make the effort to not have it.

however, post-banking reform it is now an "opt-in" issue. the banks CANNOT put someone on overdraft protection unless they explicitely ask for it.

and overdraft protection always has fees when it is used. it is unclear why you were charged twice, unless you had insufficient funds for both transfers that were attempted.

[BarryG]

This is not predatory in the least. It does sound annoying. Why don't you call and explain what happened? Even Wachovia has refunded fees like this for me, over the phone. I'm sorry you miss your old bank.

[frogsanddawgs]

I recently joined a credit union and so far I don't have any real complaints. Lucky for me, all of my paychecks are direct deposit, so hopefully this will not be a problem. (Fingers crossed!)