Summit bounces check policy
The Star-Ledger - February 25, 1999
The Star-Ledger Archive COPYRIGHT © The Star-Ledger 1999
Date: 1999/02/25 Thursday Page: 029 Section: BUSINESS Edition: FINAL Size: 697 words
Summit bounces check policy
Customer protests help roll back fee By Sam Ali Star-Ledger Staff
Banks are infamous for imposing new, agonizing fees. This time, they took one back.
Summit Bancorp. yesterday beat a quick retreat - after a barrage of complaints from incensed customers - and canceled a controversial $30 "unavailable funds" fee it attached to its overdraft protection policy.
The bank also promised to refund any fees - as much as $3,500 for one Morris County business - charged since the new fee took effect last month.
The controversy stemmed from the bank's decision to change its overdraft protection rule book last month.
On Jan. 26, Summit said its overdraft protection - a line of credit that automatically grants customers a cash advance to cover unexpected cash shortages - would only protect customers when they had "insufficient funds" in their accounts.
Customers with "unavailable funds" - when a paycheck has been deposited into an account, for example, but hasn't cleared yet - were left high and dry. Those customers were hit with a $30 fee when checks did not clear because of an unexpected cash shortfall.
The bank's decision to draw a fine distinction between insufficient funds and unavailable funds cost outraged Summit Bank customers hundreds - sometimes thousands - of dollars in fees.
Morris County Tobacco and Candy Co., for example, raked up $3,500 in unavailable funds fees in one month. Kerri and Richard Curasco, the owners of Royce Sign Works Co. in Rockaway, were charged $300 in five days. Valerie Marone of Morristown was charged $360 in two weeks.
The list goes on and on.
But yesterday, the bank buckled and said it would stop charging the fee, effective immediately.
''Any unavailable funds fees that may have been incurred by Summit Cash Reserve customers will be refunded," Summit said in a prepared statement, the same day a report ran in The Star-Ledger detailing the bank's overdraft protection policy.
''Once again, we listened to our customers and responded," said William J. Wolverton, senior executive vice president and director of retail banking.
But Wayne Pettersen, a Summit customer, wants the bank to go one step further.
Rescinding the fee is fine, he said. Refunding the money is even better. But he thinks the bank should apologize, too.
Like thousands of customers who were hit up for hundreds of dollars in unavailable funds fees since Jan. 26, Pettersen said he spent hours on the telephone with bank representatives agonizing over the charges he incurred.
''I spent half an hour on the phone with these guys," said Pettersen, a 50-year-old dispatcher with the Con-brook Trucking Co. in Bridgewater. "Who has the time to be bothered with that? I don't need to spend a half hour on the phone with their 800-number figuring out what check cleared and when it cleared and who deposited what and where. I feel they should issue a letter of apology to all the people they did this to."
Although Summit said it will refund the fees, it would not disclose how much money it actually owes customers.
But consider this: Summit has more than 250,000 overdraft protection accounts. Each time the unavailable funds fee kicks in, a customer is charged $30.
The news brought relief to Summit Bank customers with overdraft protection.
''The consumers of New Jersey have been vindicated," said Christina Lenihan, a 39-year-old mortgage broker in Bergen County who was charged $90 in unavailable funds fees on Feb. 12.
But while the bank scored some points with its customers yesterday, a few said they were still closing their accounts and leaving the bank for good.
''I'm thrilled with the fact that they rescinded the fee, but I'm still closing my account," Marone said. "In the long run, they lost out. I don't want to do business with them anymore."
This isn't the first time a bank has rescinded an unpopular fee in the face of customer rage.
Two years ago, First Union Corp. did an about-face after it was battered by a wave of bad publicity about its decision to charge noncustomers a fee to cash government checks at the bank.
Etc. BOX: "I spent half an hour on the phone with these guys. Who has the time to be bothered with that?" - WAYNE PETTERSEN, disgruntled customer