The Great American Cyber Ripoff


Like many Americans past the age of 50 I possess a moderate understanding of the computer and its many convenient uses when conducting our everyday business. The ability to pay bills on line, electronic banking, purchases direct from manufacturers, automatic deposits and yes filing of Federal and State taxes are all wonderful and beyond our wildest imaginations when we were growing up. All of these services are marketed as reducing the overall cost of doing business and made available to immediately upon filling out simple application.  However, woe unto him that doesn’t pay strict attention to what may be occurring under the surface as a result of the presumed “automatic features of the programs” that administer the services you have selected. For instance, have you ever attempted to stop an automatic payment once it has been authorized? Reverse a duplicate automatic payment? Change bank accounts associated with an automatic payment? Each of these actions comes at the risk of incurring punitive fees that in many cases outweigh the benefit of making the change.

Typically, the response of the banks is that only the initiating entity may make a change or cancel the authorization. The debiting entity will assert that they cannot make any changes during the current “automatic” cycle and it can take up to six weeks before the change becomes effective. The bank on the other hand will place a stop on the payment for 6 months at a fee of about $30.00. In the interim if the charge continues to be processed by the issuing entity the bank will automatically assess charges to your account. In a recent situation I closed a business account and cancelled all automatic chargers and had them transferred to another bank prior to the closing. The billing entity continued to charge the closed account. The bank continues to assess overdraft fees to the closed account that for a$9.95 charge has reached over $300.00. Speaking to the bank is like hitting my head against the wall and they refuse to reverse the charges. WELL I ALSO REFUSE TO PAY!

Another fine feature the banks are experts at is waiting until just before a direct deposit is due to assess bank fees and other charges sufficient to place your account into an overdraft situation. In many cases they will hit you for numerous transaction overdraft charges the same day the deposit is made which is more than sufficient to cover all transactions occurring that day. We have documented recurring situations that demonstrate how the banks sapped hundreds of dollars out of our account using this “automatic accounting” gibberish to justify their actions. I know from having reviewed websites that complain about bank practices that this practice generates millions of dollars for the banks.

Banks also pride themselves on having made deposits immediately available to their customers that take advantage of their electronic services. We have a small business that deals with credit card purchases only and process all transactions through merchant machines. We make deposits in our own account as well as those of our clients. Banks and credit card companies charge fees ranging between 2.5 and 5% of each transaction which is reasonable if the funds are immediately available to the merchant, but the banks will hold the deposit for up to three days (using your money) before the deposit hits your account. That represents one huge amount of our money, considering all the large and small businesses that utilize these services, being used by the banking system. So much for truth in advertising.


I could go on for hours recounting the nightmare of trying to straighten out merchant problems that occur when banks merge but I’m not sure I will live that long. Needless to say we have spent countless months chasing deposits to our client’s accounts only to have the banks admit they didn’t know what happened to the money.

Our latest adventure with “Cyber Land” arrived today in the form of an early Easter Basket, a shutoff notice from our satellite provider for non payment of our bill which has been an “automatic electronic authorization” for at least the past 5 years. Moreover the amount of the bill was over $400.00 dollars. Normally the charge is between $90 and $100 dollars. Needless to say we spent in excess of one hour on our cell phone attempting to determine how charges appeared for premium services cancelled 8 month ago, a double charge for our basic service, and late charges accruing from non payment for services not received. After conducting a line by line review and adjustment to the account the customer Service agent indicated she had never seen anything so screwed up and had no idea how it could have happened. Thankfully, in the midst of this mess, a glimmer of good luck appeared. The satellite company apparently had cancelled the automatic debit to our account. I cannot imagine the resulting overdraft fees and intense argument with our bank that would have resulted from attempting to reverse the incorrect charges. 

So now I find myself somewhat paranoid and am checking electronic activity on my bank accounts on a daily basis. A new event has come to my attention. Two deposits made to our account one for seven cents and the second for eleven cents. Neither my wife nor I recognize the identification of the depositing entity. We immediately placed a call to our bank and confirm the deposits are a test for access to our account. After 45 minutes on the telephone and being transferred to four different individuals, we are given the identity of the depositing company with their telephone number and told we would have to contact them to stop access to our account. Keep in mind we never authorized access nor have we ever heard of this company. The contact number turns out to be a bank in Wisconsin and after another frustrating hour we find out the initiating entity is an on line bill paying company and told we must call them to stop access to the account. Again, we have never contacted this company much less given them our account information. The conversation with the bill pay company is ridiculous, as we are told we must contact our bank to cancel any activity on their part. Now I lose it! I inform the bill paying company idiot that if I see any further activity from them I will report them to the SEC and whatever authority I must to put them out of business for fraudulently accessing my bank account.  

My wife and I have decided that we will exit our business in the coming year, close all bank accounts save our personal account, cancel all automatic payments and revert to the old fashioned methods of doing business. Hopefully, this will add years to our lives and reduce the aggravation of having to deal with a bunch of mindless programmed robots, many of whom cannot speak English, currently administering customer service for the banks and other type financial and retail institutions.  Beware “The Great American Cyber Rip Off.

 Richard H. Frank

March, 2009

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