Banks and overdraft

[DawnM]

An extended family member is telling me that his mentally disabled (adult) child is racking up overdraft fees to the tune of $35 per overdraft.  He is also on the account as he helps her with her funds.  

The problem right now is that she has a boyfriend who seems to be after her disability checks and money.  While it is easy to say, "well, don't give the boyfriend her bank card" it is difficult to manage as she does live on her own so she has quite a bit of freedom that way.  And the boyfriend is BAD NEWS.  This is just one of the issues they are having with him.

I know that my credit union doesn't even allow you to purchase or take out money if it isn't in the account.   It just declines the charge.  No fees.

Are there any regular banks that do this?  They currently have BofA.

I am trying to help the dad to help her.

Please don't give me parenting advice to tell him, I am not in a position to tell him what to do, I am only trying to help him find an easy solution for the bank situation.

Thanks,

 

Dawn

[teachermom2834]

At our bank you can opt in or out of overdraft protection. I can’t remember which is the default but I know for dh and my accounts we opt into overdraft because it would be such an odd thing we would rather not have a payment declined if we made a mistake. However, when we set the teens up with accounts we opted out of overdraft protection so that they just couldn’t use it if the money wasn’t there and didn’t rack up a bunch of fees without realizing they were out of cash.

Like I said, I can’t remember what the default setting was on the account but I’m pretty sure the “in” or “out” on overdraft protection is a simple function on the online banking portal.

[Jenny in Florida]

I know the banks we deal with (Chase and Ally) both give us the option to turn off overdraft privileges on our accounts. However, I don't know if that is a workable option if the boyfriend has access to the account, since he can probably just get it turned back on. 

If the father has any kind of guardianship and might be able to speak to someone at the bank, that might be the best option.

[DawnM]

2 minutes ago, teachermom2834 said:

At our bank you can opt in or out of overdraft protection. I can’t remember which is the default but I know for dh and my accounts we opt into overdraft because it would be such an odd thing we would rather not have a payment declined if we made a mistake. However, when we set the teens up with accounts we opted out of overdraft protection so that they just couldn’t use it if the money wasn’t there and didn’t rack up a bunch of fees without realizing they were out of cash.

Like I said, I can’t remember what the default setting was on the account but I’m pretty sure the “in” or “out” on overdraft protection is a simple function on the online banking portal.

 

Thanks, I will suggest he call the bank and ask.  I think honestly what he needs to do is get HIS name off the account, have it just be in her name, and that way it won't affect his banking or credit in any way, and then turn off overdraft if he can.

[DawnM]

1 minute ago, Jenny in Florida said:

I know the banks we deal with (Chase and Ally) both give us the option to turn off overdraft privileges on our accounts. However, I don't know if that is a workable option if the boyfriend has access to the account, since he can probably just get it turned back on. 

If the father has any kind of guardianship and might be able to speak to someone at the bank, that might be the best option.

 

There isn't any guardianship that I know of.  But he may be able to get her her own account without his name on there.

Boyfriend has her bankcard sometimes but don't think he can log in to her account.  Not sure.

[Lanny]

2 minutes ago, teachermom2834 said:

At our bank you can opt in or out of overdraft protection. I can’t remember which is the default but I know for dh and my accounts we opt into overdraft because it would be such an odd thing we would rather not have a payment declined if we made a mistake. However, when we set the teens up with accounts we opted out of overdraft protection so that they just couldn’t use it if the money wasn’t there and didn’t rack up a bunch of fees without realizing they were out of cash.

Like I said, I can’t remember what the default setting was on the account but I’m pretty sure the “in” or “out” on overdraft protection is a simple function on the online banking portal.

 

This...  The person in charge of the bank account needs to fill out a form with the bank Customer Service rep and NOT select the Overdraft protection. I remember we did that when DD turned 18 and she took over her bank account. One could end up with hundreds of dollars in overdraft fees if things go awry with Bounced Check(s) and/or ATM machines. We don't want to risk a lot of fees so we declined the Overdraft protection.

[Scarlett]

5 minutes ago, DawnM said:

 

Thanks, I will suggest he call the bank and ask.  I think honestly what he needs to do is get HIS name off the account, have it just be in her name, and that way it won't affect his banking or credit in any way, and then turn off overdraft if he can.

Yes to this,  since he is not her guardian I think that is the best option.  But they won’t let him remove his name until all the fees are paid I think.  

[Bootsie]

3 hours ago, DawnM said:

 

Thanks, I will suggest he call the bank and ask.  I think honestly what he needs to do is get HIS name off the account, have it just be in her name, and that way it won't affect his banking or credit in any way, and then turn off overdraft if he can.

He should be able to get overdraft protection turned off on the account.  That is a service that the bank provides for a fee.  The only problem would be if checks are written on the account and there is not enough money in the account to cover the checks, the bounced check fees may be more than the overdraft protection fees.  If he does indeed need to help her with finances, I would not want him to remove his name from the account, because then he could lose the ability to monitor the account and know what is going on.

[DawnM]

1 minute ago, Bootsie said:

He should be able to get overdraft protection turned off on the account.  That is a service that the bank provides for a fee.  The only problem would be if checks are written on the account and there is not enough money in the account to cover the checks, the bounced check fees may be more than the overdraft protection fees.  If he does indeed need to help her with finances, I would not want him to remove his name from the account, because then he could lose the ability to monitor the account and know what is going on.

 

I don't think she writes checks at all.  Mostly the concern in the ATM withdrawals.

[Slache]

I had mine (US Bank) set to overdraw if I wrote a check, but not with my card.

[Ottakee]

Yes to turning off the overdraft.  Be aware though that "bills" on a debit card can not be turned off....things like Netflix, Amazon prime, etc.

Either he needs to take his name off the account or try to get financial guardianship of her.  Does she get disability?  If this is disability money then maybe he could become payee (much easier to do than Guardianship).

I have 3 kids with special needs I am payee for and a disabled brother.  Finances and financial protection are a huge concern.

[Bootsie]

13 minutes ago, DawnM said:

 

I don't think she writes checks at all.  Mostly the concern in the ATM withdrawals.

There could also be issues if some bills, like rent, are set up on autopay, but all of the cash has been withdrawn from the ATM.  

If the problem is really the ATM withdrawals, another thing he needs to check and make sure that the car cannot be used for cash advances via a credit option.  The fees and interest on that can be extremely high.

[DawnM]

2 hours ago, Ottakee said:

Yes to turning off the overdraft.  Be aware though that "bills" on a debit card can not be turned off....things like Netflix, Amazon prime, etc.

Either he needs to take his name off the account or try to get financial guardianship of her.  Does she get disability?  If this is disability money then maybe he could become payee (much easier to do than Guardianship).

I have 3 kids with special needs I am payee for and a disabled brother.  Finances and financial protection are a huge concern.

 

She gets SSI.  As far as I know, he pays her bills.  He bought her the house with cash, so, no rent.  I think he pays directly for utilities and phone.  

[Ottakee]

6 hours ago, DawnM said:

 

She gets SSI.  As far as I know, he pays her bills.  He bought her the house with cash, so, no rent.  I think he pays directly for utilities and phone.  

If she truly has SSI (vs SSDI or SSrDI) then if she pays rent or helps pay back the housing costs then she will get more per month.  

This stuff is all so complicated.  I manage finances and Social Security paperwork for 4 individuals on 3 different forms/programs.  It is a mess.

[DawnM]

50 minutes ago, Ottakee said:

If she truly has SSI (vs SSDI or SSrDI) then if she pays rent or helps pay back the housing costs then she will get more per month.  

This stuff is all so complicated.  I manage finances and Social Security paperwork for 4 individuals on 3 different forms/programs.  It is a mess.

 

Yeah, I have no idea about any of that.