alt Hacker NewsBank of America had a class action against them because they would reorder transactions to make you overdraft.
For example, when I was relatively poor and near 0 balance in like 2009 era I’d wait for my direct deposit to come so I could grocery shop and pay bills.
When it deposited, the funds would become available to use even though the transaction wasn’t cleared, pretty normal so far.
So say you pay 2 bills and grocery shop, come back on Monday and you’d see that your pending deposit vanished, 3 transactions cleared for 3 overdrafts, then your deposit cleared afterward.
This is just one that I know about because it happened to me. I wonder how many less blatant scams like this exist that most people aren’t even aware of.
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This is 100% true and also a tactic used by PNC when I was a near zero person. The hack around it was to try to withdraw cash, then use that. They wouldn't let you overdraft cash withdrawal. That's one anecdotal likely stale trick to avoid the traps they set.
TD Bank was slapped for the exact same process. Transactions would be reordered to ensure you incurred hundreds in overdraft fees even though you had just deposited a check.
It's a bit of reverse check kiting: The bank changing when your check clears so that you actually don't have the money you think you do.
Now, there were fine print that stated only X dollars worth of your deposit would be "Available immediately", but even that was a lie.