The Daily Show: Ears Edition - America's Out-Of-Control Overdraft Fees - If You Don't Know, Now You Know

Episode Date: August 26, 2022

In the 90's, consultants pitched the idea of overdraft fees and they've been causing Americans problems ever since. Here's a look at the history of these fees and how they continue to screw people over in another edition of If You Don't Know, Now You Know.See omnystudio.com/listener for privacy information.

You're listening to Comedy Central. We all deal with things in life that are just annoying, like brain freezes or looking for parking or having to trim your nails all the time. Yeah, because apparently it's cool when Wolverine grows them out, but when I do it is gross. I mean, I don't understand how that's fair. But nothing is worse than when little annoyances also cost you money, which means few things in life are more annoying than overdraft fees, you know, and we've all dealt with this shit before. You accidentally spend more than you have in your bank account,

so now the bank is charging you even more money that you don't have. Even if you go over by like a couple of dollars, your bank might hit you with a 35 dollar fee, which which makes Bitch, if I had the $35, I wouldn't be overdrafting, would I? I mean, if there has to be a penalty, it should be a non-monetary one because you know the person doesn't have the money. They should be like, all right, you've got to lick the ATM. But not money. on a bill to rein in overdraft fees, which is good because people are just about at their breaking point. This is just wild.

A woman left over a bank counter while arguing with the teller. She didn't want to pay overdraft fees, so she went over the counter. It all happened here inside this Chase Bank in Beaufort. In the video, a woman is heard shouting at a bank teller. Then the woman climbs over the counter and demands the breaking. T. T. This. This. This. This. This. This. This, th, th, th, the break, th, th, th, th, th, th, the break, th, the break, th, th, the breaking, the breaking, the breaking, the breaking, the break the break thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th. This is is is is th. This is is is th. This, th. This, th. This, th. This, th. This, th. This, thi. This, thi. This, thi. This, thi. This is thi. This is thi. This is thi. This is thi. This is thi's is just is just is just is a thi. This is just is just is just is just is just is just is just is just is a thi. This is a th video a woman is heard shouting at a bank teller. Then the woman climbs over the counter and demands her money. The bank teller backs up and that's when the woman steals $750 from a cash box. Okay. On the one hand, yes, a bit of an overreaction. But on the other hand, you're also kind of rooting for her, right? Yeah? I mean,

that's how much we all hate overdraft fees. Like watching this as a bystand, it must have been so confusing. It's just like, hello, I'd like to report a robbery. Yeah, who's being robbed? Well, to be honest, both of them, actually. It's balanced. Never mind. And I know what you're thinking right now. Look, I hate overdraft fees too, but I'm not pole vaulting over a counter over $35. Well, once you know more about how these fees work, you just might. So let's find out where these fees came from and how they screw you over in another edition of if you don't know, now you know. So let's start at the beginning. In the 1990s, a bunch of consultants pitched banks on overdraft fees.

A cool new way to squeeze money out of their beloved customers. And as evil as it is, you've got to hand it to them. It's definitely creative. Yeah. In fact, I bet the executive who came up with this idea blew everyone's minds. Which is like, you know how we usually take money from people who have money? Well, what if we also took money from people who don't have money? My God, you've done it, Jenkins, cocaine for everyone. Yeah.

When they came up with this idea, they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they didn't they this idea. They didn't call them overdraft fees, no. The phrase they used for it was overdraft privilege programs. Yeah, because you see, customers would now have the privilege of paying extra for being broke. And you've got to admit, that's hell of spin right there, right? They should do that with everything in life. They should hire these same people. Yeah, just to give you excuses like, nah, she didn't dump my ass, she enrolled me in a masturbating a loan privilege program. Everything's great. I'm doing great. I'm doing real good. So you see what happens is basically banks frame it like they're doing you a favor by allowing you to take out extra money. In fact, just listen to what one woman says, she was told by her bank

after she got hit with these overdraft fees again and again without realizing it. We was $1,400 overdrawn. Funds obviously were not there. They had never been there over a period of time. Why did you continue to accept the charges? Their response was, you have been such a good customer for all these years. We did not want to embarrass you at the check-at counter. Wow. Wow, you've got to be kidding me. The bank kept charging overdraft fees because they didn't want to embarrass this lady. Really? They didn't want to cause any embarrassment. Everyone knows people value money over embarrassment. That's the only reason that reality shows exist. Are you kidding me? Also, you know that explanation is bullshit because it's impossible to get embarrassed in front of a checkout counter worker, okay?

They've already seen it all. Yeah, they've seen every single one of us buying 15 bags of cheetos. And we say it's for a Super Bowl party, but they know it's July. So the banks say, this is simply a service they're extending to their customers, but the truth is they spend a lot of effort Manipulating you into paying those fees like for instance Did you guys even know that they're totally optional? Do you know that? Yeah, totally optional ever since a 2010 ruling by the federal reserve? Customers have to opt in to overdraft fees and now you're probably thinking wait? I never th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th th, th th, th thi thi thi thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi, thi's thi's thi's thi's thri's thri's thri's thriiiiiiiiiiiiiiiiiiiiiiiiiiiiii? thr-i? thr-i, th opt in to overdraft fees. And now you're probably thinking, wait, I never did that, but you probably did.

Yeah, you just didn't realize that's what you were doing when the bank gave you that stack of papers to sign. Because nobody actually reads that shit, right? Most people see the size of the agreements and you're just like, I'll just wait for HBO to to try and to to tryn't to to to read it it into it into it into it into read it into read it into read it into read it into read it into a trick you into signing up for overdraft fees, some of them will literally reorder the events of your life to make sure that you pay the most. Some large banks will manipulate the sequence of customer transactions to draw more overdraft fees. This is how it works. Take Joe. Joe has $100 in his checking account. He buys breakfast on his way to work, paying for it with his debit card. Joe next fills up his gas tank. tank. tank. tank. tank. tank. tank. tank. tank. ta ta to to to to to to the to to to the to the to to the to to to to to to to to to to to to to to to to to to to to to to to to to to to to to make to make to make to make to make to make to make to make to make to make to make to make. to make. to make. to make. to make. to make. to to to to to to to to to to to to to to to to to to to to to to to to to to to to the the the the the the th the the. the the. the the. the toe. toe. the toe. toe. toe. toe. to to to to to to to his way to work, paying for it with his debit card. Joe next fills up his gas tank. Later, he buys lunch, and then an afternoon cup of coffee.

Finally, on his way home, he stops at the supermarket to buy groceries. The last purchase leaves Joe's account overdrawn by $15. But rather than charge him one overdraft fee, his bank rearranges his purchases from highest to lowest and charges him three overdraft fees. By clearing the highest purchases first, banks are able to get to the overdraft quicker, thereby maximizing profits. God damn, that is evil.

It's bad enough that these billion-dollar corporations are charging poor people overdraft fees, but to make it worse, they're manipulating the numbers so they can charge even more. Yeah, the third purchase came before the first purchase. That's not how you count. Either these banks are robbing people or they learned numbers from Star Wars. It goes, four, five, six, one, two, three, seven. That's just math. That's just math. And this is another example of how corporations can commit crimes that none of us can, right, right, right, right, right, right, right, right, right, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, th, thi, thi, thi, thi, thi, thi, their, their, their, yeah, yeah, yeah, their, yeah, their, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their, their their their their their their th, their their th, thi, their their their their their their their, can commit crimes that none of us can. All right? Because this is this is theft, but they'll be like, oh no, it's just the way. No, it's theft. No individual can get away with rearranging the sequence of time.

You try this. Every single one of you in this room, you try it. You try it today, but I already paid for it next week. Now if you'll excuse me. But like most evil plans, there's big money in what the banks are doing. In fact, they collected more than $8 billion in overdrafts last year, just overdraft.

Yeah, one bank made so much money off of overdraft. The CEO actually named boat the overdraft. Yeah, and that's rubbing it in. That's like if Elvis had a boat called Black People's Music. I mean I get that's how you got rich, but maybe don't advertise it. Oh, oh. Imagine that on your boat. It's like, shit, like where's a Somali pirate when you need one, you know? Just for him to be like, look at me, huh? This is a bad tha tha tha tha thi thi thi thi thi th. th. th. th. th. th. that that that's that's that's that's that's that's that's that's that's that's that's that's like that's like that's like that's that's like that's like, that's like, that's like, and that's like, and that's like, and that's like, and that's like, and that's like, and that's like, and that's like, and that's like, and that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's that's thi. that's thi, and that's like, and that's like, that's like, that's like, that's like, that's like, that's like, that's like, that's like, that's like, that's like, that's like, that's like him to be like, look at me, look at me, huh? This is a bad name for a boat, huh? Look at me. Now, the good news is some banks seem to be getting the message

that customers and Congress are fed up with these fees. Bank of America and TD Bank are settling major lawsuits, while some banks have started ending their overdraft programs voluntarily, which is good. But until Congress passes this law this law this law law law law law law law law law law law law law law law law this law law law this law this law this law this law this law this law this law this law this law this law this law thoenole thosesesese is those has to be to beaqqqqqqqqqqqqqq. to beaq. to bea. to bea. to bea. to bea. to bea. I, to bea. I, to be to be to be to be to be to be to be. I, to be. I, to be to be to be. I, to be to be to be to be to be to be to be to be to be to be to be to be to be th. I th. I th. I thi. I will thi. toe, thi. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. toe. to voluntarily, which is good. But, until Congress passes this law protecting customers from the most egregious overdraft policies, we figured that there was an opening in the market for a bank you can really trust. Sick of overdraft fees that drag you into debt, wish there was a bank that treated you like an adult? Well, now there is.

Nope, you're broke. Introducing Broke Bank. At Broke Bank, we're not going to let you think you have money and then surprise you with an overdraft fee. When you're broke, we'll let you know. $7 for coffee, just get a tap water. Is it embarrassing? A little.

Insulting? Definitely. But we're committed to honesty, like really committed. Come on, we both know you didn't win the lottery. Just walk away. What's in your wallet? Nothing. Are you written a jet scheme, moth-ske? You only got $12, and you need that for a shirt.

With Broke Bank, you'll never get into opting in for hidden fees. The only thing you'll get from us is the truth about how poor your broke ass is. You can scream at me all you want, but at least I'm not charging overdraft fees. Broke Bank, you deserve honesty. You broke. The Daily Show with Trevor Noah Ears Edition. Subscribe to the Daily Show on YouTube for exclusive content and stream full episodes anytime on Paramount Plus. This has been a Comedy Central podcast.