Some institutions get more hate than they deserve. Most lawyers and police officers are just doing their jobs, and most businesses really are simply trying to make a profit. But banks ... well, banks make it really hard to defend them. They are the middleman in every transaction (you simply can't function in modern society keeping your cash in a coffee can buried in your yard), and goddamn do they exploit their position in the shadiest ways imaginable. Let's take a moment to examine some of the perfectly legal ways these guys screw us on a daily basis:
(And if you think banks are sleazy, wait till you see the dating website in Cracked's new Rom.Com series.)
#5. They Can Arbitrarily Manipulate Your Payments to Create Overdraft Fees
We understand that banks aren't kindly rich uncles who can dole out money when they feel sorry for us. They have to charge some kind of fine when we try to take out more money than is actually in our accounts, otherwise it'd be a free money festival forever (or until the whole system came crashing down hours later). But where banks take it to the next level is when they carefully arrange things so that, with one mistake, they can keep stomping you with what amounts to a 1,000 percent interest rate. They can charge anywhere from $20 to $35 for every transaction you make while over the limit -- even if that transaction is itself for only a few dollars. But hey, it's all about teaching the customer not to make that mistake in the future, right?
So they're like that other uncle then. The one with the belt.
Nope! Once the banks saw how much cash they could make from the fees, the next step was to carefully trick their customers into overdrawing their accounts more often. They do this by quietly manipulating the order in which your purchases are charged to your account to nail you with the maximum number of overdraft charges. We're talking "half of your goddamn money straight to the bank" numbers here.
Here's how it works. Let's say you have $100 in your checking account and you purchase the following items over the course of the day:
A pack of gum: $1
Two dildos (one for each ear): $15
Some gas: $10
The "Best Actor" Academy Award Steven Seagal won for Under Siege, bought from a street vendor named Handless Bob: $25
That still leaves you with $29. Hooray, you can manage your money!
"Oooo, just enough to buy the actual Steven Seagal."
Ah, but you forgot to note that you had a $100 phone bill due the next day. Well, shit, that means one of those transactions will put you in the red, costing you a $35 fee. That's what you get for losing track of due dates, right?
But you're not going to pay one fee. See, the bank doesn't have to process the charges in the order they came in. What they'll do instead is start with the $100 phone bill -- even though it came in after the other purchases. Why? Because that immediately brings your account down to zero. Then they can process those previous, smaller charges so that they can nail you with a $35 overdraft charge for every fucking one of them. Even that goddamn pack of gum sets you back the price of a tank of gas. Now your account is $175 in negative territory, and until you pay all of that back, every single purchase will cost you another $35 surcharge. This is when a bunch of Nigerian princes start lining up to ask your bank how they pulled that off without you stabbing them in the face.
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"They used to stab us with our pens. That's why we added chains."
If you're thinking that it's a clear scam, the government actually agrees with you. The Federal Deposit Insurance Corporation has been all over that shit in recent years, and their actions have caused about 40 percent of banks to drop this particular practice. What actions did they take, you ask? Why, the FDIC wrote the banks a letter and asked them to stop.
Well, that's what happens when one of us gets caught scamming millions of dollars out of people, right? The government writes us a sternly worded letter and requests that we stop doing it?
#4. They Can (and Will) Seize Your Money
If you, say, don't pay your bar tab, your local barkeep has to take several infuriating steps to try to get his money: He has to locate you, chase you down, smash your knees, and empty your wallet. Slightly more respectable bill collectors have just as many obstacles between themselves and unpaid invoices, the most severe step being to sue to have money taken directly out of your wages. But even then they can only do it in certain amounts, and by law there is some money they can't touch. For instance, they can't garnish funds out of Social Security checks. That shit is strictly earmarked government money, not to mention that taking it would be monstrous because those checks go to some of the poorest, oldest, and most disabled people in society.
Banks, however, can do whatever the hell they like, because they already have full access to our money.
"Eh, you got cats. You can eat those."
You're keeping it in their building; they can just reach right in. They could be in the vault right now, rubbing their dicks on it. So while nobody can garnish money from a Social Security check, once it's deposited into a bank, it joins the pool of money that the bank considers free for the taking. So if you happen to owe the bank money (like those overdraft fees mentioned above), they just poke in a straw and slurp that money right out.
Think we're exaggerating in order to make banks out to be mustache-twirling villains? OK -- take the story of this Cleveland woman, who fell for a check fraud scam that left her account deep in the red. Her bank promptly notified her that they were going to take her Social Security check to cover the overdraft. "But why doesn't she close the account and go to a different bank, Cracked?" Hey, good idea! She did that, then quickly found out that banks talk to each other. She was immediately blacklisted and unable to open a checking account elsewhere.
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So she went to a store that cashes checks, and then she got mugged.
Of course, there are some cases where this practice is deemed too evil even by bank standards: Between 1993 and 2003, Bank of America gleefully seized over $280 million of Social Security funds for assorted bank fees from the accounts of their elderly and disabled customers. A California jury eventually awarded the customers damages in the ballpark of $1 billion, but we're guessing that's not a huge source of joy for the poor people who woke up to find they had far less money for food than they had counted on.
Hey, speaking of screwing the elderly ...
#3. They Sell Old People Services They Can't Use in the Hope That They Will Die
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A man visited his local Bank of America branch to do some routine financial muddlin' about. He was referred to a financial consultant and eventually force-sold an annuity that would only be beneficial if it could be maintained for a bare minimum of seven or eight years. Otherwise, it would only be beneficial to the bank.
So what's the problem? That man was 86 years old, and presumably not a Highlander.
"I don't even use the free toaster they gave me. Who has that kind of time left?"
When his daughter learned what the bank had done, she tried to find a way out of it for him. Sadly, the only way to undo it was to pay a whopping $25,000 to the bank. Hey, just consider it extra incentive to stay alive, old timer!
There's a reason the elderly are the most frequent targets of scammers -- they have money and can be easily confused with enough doubletalk. They often have a hard time admitting that they do not understand something, or maybe they just quit giving a shit 20 years ago.
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"Bitcoin? No, thanks. I'd like the whole thing."
The banks figure that if it works for everyday con artists, why wouldn't it work for massive financial institutions? Thus, they take products that don't pay off for the customer unless they hold them for several years and specifically sell them to the elderly, rolling the dice on the customer dying before they see any benefit. Of course, the danger is that a fiscally savvy grandchild will find out what has happened and raise hell, so you make sure the contract includes terms that make it impossible to back out. At this point you picture Gordon Gekko shaking his head and saying, "Jesus Christ, how do you people sleep at night?"