The $36.10 Pack of Gum That
Ruined Lizzy’s Birthday Surprise…
EVG Research Team here. You've known for years that big banks make lots of money off excessive fees. Some people even call them greedy.
But could they really turn a simple pack of bubble gum into a $36.10 extravagance that stole a birthday surprise from a little girl?
Well, they can if you're Heath Shea.
A New Beginning
Heath was ecstatic to finally find a job in nearby Hillsdale.
6 year old Lizzy was excited too. “So do you think I'll be able to get a bike now that you have a new job, Daddy?”
Heath beamed. “Well, your birthday is coming up in a couple weeks, sweetie … so I'll bet we can make that happen.”
“Goody, goody!” cried Lizzy, bouncing up and down. “I can't wait!”
“Well, it's not your birthday yet …” cautioned Lizzy's mom with a gentle smile. “And there's no promises.”
Heath understood Sharon's wariness. Money had been tight for months after the layoffs at the factory.
But he was confident about this one. He had all the details worked out. They'd gotten rid of all their credit cards and budgeted carefully. Lizzy's new bike was part of the plan.
Coast clear, Heath cranked the steering wheel and maneuvered the U-Haul rental truck up to the gas pump.
The 156 mile move had barely used a half tank. He slid in his debit card, filled up the truck and yanked the receipt out of the slot.
Heath smiled. $55.17 worth of gas. His plan was right on target.
A quick mental calculation confirmed it. He and Sharon had saved up just over $700 for this move. After the gas, it was down to six fifty or so. Still plenty left over.
Moving themselves was saving a ton of money. Plus, he'd already paid the first months rent and deposit on the new apartment. They even had enough to stay in a motel tonight and let Lizzy swim in the pool.
They just needed to get by until his first paycheck, and Heath was confident they'd have at least a couple extra hundred leftover by then. Plenty to finally get Lizzy her first bike.
She'd been asking for almost 2 years now.
The move unfolded exactly as planned. Heath started his job, and their new life seemed like a dream come true.
This Made Him Cry
Except for one nightmarish detail. The one little slip-up that made him cry.
That's how Sharon found Heath two weeks later. Slumped over at the bedroom desk, elbows on knees, face cupped in hands.
Her heart raced. She'd only seen Heath shed tears once before. When his mother died.
She couldn't even imagine what this could mean…
“What's wrong, honey?” she ask quietly.
Looking up, disappointment and failure oozed from his damp, swollen eyes.
“I messed up. We can't get Lizzy that bike for her birthday tomorrow.”
“What happened Heath? I thought we had a cushion in our account…”
“We did. But take a look at this…”
Heath handed her the bank statement.
Her eyes quickly fixed on the offending text.
Eight overdrafts. Thirty five dollars each. $280 dollars in fees.
Her eyes quickly scanned to the bottom of the page. Only a $37.18 balance left in their account.
And Heath didn't get his first paycheck for another 3 days.
“How did this happen? We had the money! And we still have a positive balance!”
“I know. But I used the debit card for the U-Haul rental. That's what screwed us over.”
“But I thought the U-Haul only cost $260?”
“It did. But I didn't know how long I'd need. Remember how we weren't sure our apartment would be ready right away? Well just to be safe, I told them we might need the moving van for 4 days. So U-Haul put a $500 hold on the debit card until we turned it back in.”
“But that still wouldn't overdraw us.”
The Sneaky Bank Trick That
Cost Lizzy Her Birthday Bike
“I know.” continued Heath. “I guess when U-Haul charged the final bill and actually took the $260 from our account, the bank didn't release the $500 hold. So starting right then, we had $760 charged against our account which made us overdrawn.”
“That's not fair! So is it U-Haul's fault?”
“No. That's the thing. U-Haul released the hold before they charged the $260. But the bank says they reserved the right maintain the hold for up to 2 full weeks at their discretion.”
“That's horrible. Can't they reverse it?”
“I tried. I spent almost an hour at the bank trying to figure out what happened. And even though they were very nice, they wouldn't reverse the charges. They showed me the policy and it's right there on the agreement we signed with them.”
“But how did we get 8 overdrafts? That doesn't make any sense.”
“I asked about that too. I guess they order the charges on the account from highest to lowest each day. Once the $260 charge put us over the limit, every lesser transaction from that day was a separate overdraft. So even though we filled up with gas right before we turned in the rental truck, that still counted as an overdraft.”
“That's stupid.” said Sharon, getting angry now.
“It is. Because the bank actually removed the $500 hold the very next day. But we had a whole bunch of smaller transactions on our moving day. Like the motel bill … and when we took Lizzy to McDonalds.”
The $36.10 Pack of Bubble Gum
“Even that $1.10 pack of bubble gum we bought for Lizzy at the Quick Mart was an overdraw,” Heath added.
“You're kidding! They charged us $35 for a $1.10 overdraw?”
“I know. It's the most expensive pack of gum ever. And it means we can't give Lizzy a bike on her birthday. We'll have to wait at least a couple months before I can save up enough again…”
“Well I'm gonna fight this,” declared normally docile Sharon. “They're not getting away with this!”
EVG Research Team back again…
Don't worry. We'll tell you how the story ends.
But first … what do you think?
Does this story sound made up? Far-fetched? Too hard to believe?
Believe it or not, it's completely true. Only the names have been changed.
Because the sad truth is…
Bank Fees Are at an All-Time High
And the Big Banks are not backing down.
The Federal Reserve reports that U.S. Banks scooped up $32 billion in (2013) on overdraft fees alone.
That doesn't include any of their other sneaky nickel-and-dime hidden-fee ploys.
And here's the real irony. The Fed put a new rule in place back in 2009 to protect little guys like Heath from exorbitant bank fees.
Instead of helping, however, it has created a huge increase in overdraft fees that prey on the poorest and most vulnerable among us.
That's the story we'll share next time. And I promise. Once you hear about it, you'll likely be as ready to do battle with the banks as Sharon was.
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Your Partner in Prosperity,
The EVG Research Team
P.S. So, did Lizzy get her bike? Yes, eventually she did get her bike. So, to discover more strategies, like becoming your own bank and how to create wealth like the ultra-rich, click here to learn the black box investing secrets of the ultra-rich.