Check out the graphic below and click "How Wells Fargo Reordered Them" to see what happens if banks process checks and debits from larger to smaller amounts instead of the order in which consumers paid them.
By processing larger amounts first, banks can more quickly drain checking accounts, exposing much smaller debits, often only a few dollars each, to repeated overdraft fees that can total hundreds of dollars.
Consumer groups says many banks argue that larger checks are often tied to mortgages and car payments and by processing those first, consumers are actually protecting against missing important payments--even though it can lead to excessive overdraft fees.
Akron-based FirstMerit Bank currently faces similar litigation for allegedly levying excessive overdraft fees on consumers.
FirstMerit declined repeated efforts to obtain comment or explain current overdraft practices.
Jim Griffiths said FirstMerit unfairly charged him $490 in repeated overdraft fees he claims were unfair.
"I did balance my checkbook every day," said Griffiths,"and there should have been one item that bounced."
It has become such a widespread practice, Ohio Sen. Sherrod Brown is introducing federal legislation to bank the practice.
"Too often the banks have gamed the system," said Brown," and created a lot of fees that people had to pay that they wouldn't have had to pay if the banks simply cashed them in the order the banks received them," referencing how checks and debits are processed.
Chase Bank spokesperson Emily Smith said "we do process some items 'high to low' (checks), but most other items such as debit card and online transactions we post generally in the order received and have since 2010."
Fifth Third Bank spokesperson Laura Passerallo said the bank "posts ATM, debit card and account transfers in chronological order, and then process checks, online bill payments and ACH transactions in order from largest to smallest dollar amount."
At Huntington, the decision was made voluntarily "to put consumers first", said Daniel P. Walsh, Huntington Bank President, Northeast Ohio.
"Everybody's working hard, trying to make a living, paying their bills--this shouldn't be a gotcha or any kind of opportunity to take advantage of anybody," said Walsh.
"If a consumer makes a mistake, or they have a problem, it's the last thing they need is a bunch of fees that rack up."
By revamping its computer system to eliminate huge overdraft fees, Huntington Bank says it spent $30 million dollars.
In addition, Huntington says it is forgoing another $30 million in overdraft fees by allowing bank customers a 24-hour grace period if an account is overdrawn before a fee is applied.
Consumer advocates advise:
Obtain copy ofoverdraft disclosure agreements from banks. We've listed a few of those at the end of this article.
Determine how you bank processes transactions
Immediately follow up on overdrafts that may be unfair