[Editor's Note: While I am on vacation, today's blog post is by guest author William Seebeck. I've known Bill for decades, going back to our time working together at Lexis-Nexis in Dayton, Ohio during the 1980's. Bill has a wealth of experience in online systems, banking, publishing, and public relations.]
By Bill Seebeck
It’s been around 39 years since computers have been keeping the books at banks in America. I say that because the bank I was working for in 1970, now the third largest in the world or maybe number two now, it was in that year that they began computerizing accounts.
At the end of the bank day, each bank employee, save the CEO, was given a stack of account files and a stack of data entry forms. We would fill in the data entry form from the account file. Once completed, the forms were collected and sent to the key-punch department, which was operating 24 hours per day on three shifts and did so for some three months until all the bank’s accounts were entered into the system.
Once the data was entered and the system working, calculations could be brought to bear on different types of accounts and the bank could for the first time evaluate the profitability of its accounts and the cost of its services.
Well, we have come a long way in 39 years. Today, computers do everything at banks and its in real time, near instantly. While generally that is a good thing, it can also create temptations for squeezing just a bit more from an account than the bank should.
Here is an example. Your checking account has $100.00 available. You are expecting a charge of $150.00 to be made against your account, so you transfer $200.00 from your Money Market account to your checking account. However, you make your transfer at 12:30 pm and the bank has a rule, that you’re unaware of, that holds post noon transfers until 3:30 pm or until the next morning. In the mean time, your charge hits. Now you get charged for a returned item and an overdrawn account. Today, depending on the Bank, such charges can be as much as $200.00.
The computer has been programmed to notice such things and can manipulate it to the bank’s advantage.
Bank computers are also great at changing payment cycles. Many of us think that our bills are representative of 30 days of activity. That’s not true anymore. The cycle may have been changed to 20 days and unless you’re reading those little brochures with tiny little print that they send in the mail, you won’t know that something has changed. Yet, when you pay your bill, you find that you are late, other charges are attached and perhaps your interest rate has been boosted. When you make your call to find out why, you are told that you have to pay your bill sooner than last month, because your cycle has changed. A Bank’s computer system can make a cycle change for millions of customers in seconds.
Now, I’m not suggesting that banks are out there doing these things, but it has been done and unless we keep our eyes on the Bank’s computers via our monthly statements and report such activities to our elected officials, we will become new victims of banks' greed.
© 2009 WBSeebeck