what should the consequences be for a 16-year-old with $450 in overdraft fines?

Gah!

First, she got $275 in overdraft fees after having the debit card in her name for two weeks. She was warned that if she got any more, the card would be forfeited to the mom. The mom paid the fees and put a $20 cushion in the account and told her NOT TO SPEND THE CUSHION.

A week later, she's got $225 more in fines.

This is all for milkshakes and fries after school.

Any suggestions for consequences?

....other than relinquishing the card. It's spring break. She's off on a train trip to Seattle for the weekend, allowed to take a friend along and do all those girlie things like lunch and stuff. I don't see how that helps her learn anything, but I'm not the mom.

Grounding and working it off is what she would be doing.

I would have pulled the card and made the kid pay the fees the first time.

I'd ground him until he brought in a passing report card. He would call his mom and cry. She'd come pick him up. He wound up flunking out of school, on drugs, wrecked six cars, in and out of jail and clinics. He died in a car crash at the bottom of a mountain in Alabama. The moral of this story is don't enable your children to #### up.

:hug:

:hug:

or chores around the house until the amount has been paid.

And no more card.

Is there any way the bank can put a freeze on the account when the balance becomes negative?

Just kidding. The card would be history, though, and that 16 year old would be giving me their paycheck for a while.

this happens to non-16 years olds all the time, because of the way deposits and debits are handled by the big banks.

some banks don't process the charges in chronological order, they process by largest amount to smallest amount. So a debit charge later in the day can trip you up for a chain reaction $30 fees for all the smaller purchases previously.

but, they process the deposits in a different way. a very slow way.

225 for milkshakes and fries - in one week . . wow!

I'm sorry.

Take back the card. If you mention consequences, mean it. It's the only way she will understand limits. Plus work out a way she can pay back the fines.

The kid clearly has no clue as to how money works, and she's not had any consequences, so you take the card away and put her to work earning the fines.

She should never have been given the card after the first fiasco. That's a big amount to rack up and she need educating.

No milkshakes and fries until she pays back the overdraft fees with her babysitting money or whatever, and then she should pay for her snacks only with cash until figures out how to handle money.

and a swift kick in the arse.

Chores @ an agreed upon price until she 'pays you back' and no more debit cards for a while

good luck with this one, that some serious overdrafts

Even at $10 an hour, that's a lot of work to be done!

:D
That'll teach her.
:rofl:

:rofl:

:rofl:

I assume that she uses the cellphone/texter without regard to how much it costs also.

It's the most humane. :)

Geezus. She'd be in the pokey for hanging paper 'round town.

Oh, and no more debit card. Mom can give her cash and put her on a budget.

Very sad.

(or dad or anyone having to pay off the charges) them I'd say first off it's not your issue to meddle in. It's between them.

But if you are just venting here, and not meddling :) - then my answer if it was my own kid is that the consequences would equal the entire debt incurred.

Bank card - history. Restitution could either be get a job and paychecks go straight to the mom's bank account until the fees are paid back entirely. Or if there's no job to be had, then if I pay for a cell phone for the kid, I'd terminate that for long enough to save an equal amount of money. If that's a couple of years of service, so be it.

I might shut off basic cable to the house as well - for long enough to make back the cost. Or if the kid's away still, if they have a stereo and tv in their room, I might pawn that and apply the money toward the fees.

Also, I would not be buying the story that the kid spent 30 dollars a day on milkshakes and fries, that sounds like chronic lying to cover up something else.

the overdraft fine each time was $35.

And this is an extended family dwelling -- cousins, aunts, teens, the mom, and five cats. $450 "lost" from one of us means a hit on the household, as all the adults contribute.

sorry I didn't pick up on that.

The rest applies, unfortunately even if you are impacted by it, I think it's on the mom to deal with the discipline of her own kid. If she's looking for suggestions, fair game to suggest anything, and if I were in your shoes I might calmly mention "I think you might be enabling her" and let it go at that, but too much pushing of how she should raise her daughter is likely to just turn her against you and just create more tension in the house instead of resolving it.

(all of which you should take with a grain of salt cause you know your family dynamics whereas I don't know crap about them - I'm just projecting how that would work in my life)

....and I was looking for a reality check more than anything else. Like: "What do people normally do in this kind of situation. Nothing?" It does help to hear others validate one's assessment.

...spent all that and incurred the first batch of overdrafts by continuing to spend even after knowing it was gone. Then mom paid off those overdrafts and put in a $20 cushion and told her NOT TO SPEND IT. The bank will allow those little charges to go through because they make $35 on each stinking one of them.

nt

She needs to list 20 similarities to her actions and GWB's.

Maybe the shame will cure her. :)

:shrug:

Mom said the consequence for overdrafts was losing the card.
The natural consequence of overdrafts is fines.

Seems like paying $500 and getting nothing out of it is a good enough consequence in itself.

Mom should put her on a cash-only basis for at least the rest of the year, and find ways for her to work-off the money that Mom has had to fork out in carelessness-fees.

For comparison, her brother also got a debit card when he was 16, almost two years ago. He overdrafted once. Just once. $35. And he was so terrified of bouncing again that it never happened again.

Same mom. Very different kids.

Per overdraft.

:sarcasm:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5326692&mesg_id=5326692

It sounds like she nees a part time job (if she can get one in this economy) to fully comprehend the value of money.

Give her cash.

:sarcasm:

There's only one good reason, and that is to facilitate cashing birthday checks and that kind of stuff. A bank here won't cash a check written to a kid without an account.

But if she wants to go cash a check and get some cash out, that's fine.

Being able to use a debit card as free money does nothing. x(

Our credit union facilitates these free of charge for people under 18. No ATM card, and no overdraft. That way you can cash the birthday checks just fine.

:wave:

to make it clear that once it's gone, there ain't no more.

Her teenage brain may have trouble realizing that the plastic isn't an endless supply of money.

milkshakes and fries? What is she doing? Supplying her whole crew?
What is the cost of a milkshake and a fry?

....but the overdraft fine is $35 every time she uses that card for shake and fries and doesn't have money in the account to cover it.

The original 275 is about 8 individual overdraft fees of $35 each. If you had a milkshake one place and fries a different, even though the total spending was $5, the fees would be another 70. You could pretty easily do that in 4 days or less, if you were unaware/uncaring about the consequences. The 225 is only about 6 fees.

make sure they only have enough to buy their lunch and 1 milkshake and order of fries each day. When they get used to how much that costs, tell them you'll give them the debit card back for one day every once in a while until they prove they can manage it without going overboard. That might work. I'm not sure, but it seems feasible.

They could wise up and not provide themselves another source of debt, and give the kid a few bucks cash once in a while.

BTW, how many daily batches of fries and milkshakes will it take to produce a 3oo lb. teen?

...and she does have a growing weight problem (typical teenage HFCS habits) and a sugar addiction.

Then I'd take it out of her allowance. She'd wake up when her next week's allowance was half of normal, I tell you!

But you've really got to do something about those milkshakes. I mean, introduce her to Starbucks, at least. Milkshakes? What is she, a Plebian?

(Sorry, always wanted to know what it would be like to be that rich!)

Seriously, take the card out of self defense, then give her some reality course on money. You have to decide whether she's reckless, defiant, or just clueless, and decide the proper punishment. If she's just bad at understanding money, teaching is in order, but if you figure she understood what she was doing and just went crazy, punishment is needed.

Now, about your bank. First, petition them, and beg. You may be able to get some of the overdraft fees back. It happens sometimes. Second, figure out why they authorized the charges in the first place. Even debit cards have to be authorized, and if they are allowing her to keep spending when the account is empty, you've got grounds to yell at them. Use that to argue for some of those funds back, too. Usually, once the account is out of money, the charge would just be declined, and there would be no fee. If these are checks, that's a different story, but you said it was a card. They should not be allowing that many overdrafted charges. Raise hell, and see if you can get some back. (Or advice the account holder if it isn't you).

She has very poor impulse control because there are never any consequences for bad behavior. She wants what she wants, and no one ever tells her that she should have thought more carefully, or deferred gratification, or acted more thoughtfully, or finished a job well, or followed through.

I'm afraid this indulgence is fairly typical of the kids raised by permissive parents now in their forties. Her dad is absent, her mother is indulgent or enabling.

I don't know how much there was to begin with but if there was $20 in there and the kid was spending $4-$5 a time on fast food, then by transaction #5 the card should have shut off. At most there should have been 1, maybe 2 fines. But 9 of them (assuming $25 a pop)? Bank's got some explaining to do racking up fines on a minor's account. Sounds like something Walkalloverya Bank would do though, hence the good reason I use my credit union's card because they don't fine me for going over when using ATM card, they take it as their fault to prevent the overage.

Of course you stated the card should be forfeited to you, that's OK - do it as there was this understanding. As for compensation: certainly after talking with the bank and seeing what they will budge on (given present economic climate: bat's chance in hell especially if it is walkalloverya) figure out a payment plan. The kid can work it off with extra chores, give up any pay they get, give up allowances... if they're old enough and do drive to school then take away the car, failing that refuse to purchase gas so they *have* to take the school bus. Beyond that that'll be about it. It's a financial penalty imposed by the bank and as such, the 16 year old needs to pay the penalty just like any bank fee.

What kind of card was it? I hate to plug competitor products, but Visa Buxx might be a good prepaid type card that could work... could use networked gift cards as well (Amex, Visa, MC, Discover)... Allowcard (a MC product) looks good, especially since it advertises a no-fee overdraft option. Here's another option: a Paypal Premier account - it comes with a debit card, they don't charge over the limit fees, you load up the Paypal account with funds and the card holder then spends. Just don't set up back up funding on the debit card.

Bank of America debit card for a checking account.

Banks have a way of allowing a pile of little debits and aligning them just perfectly to incur maximum penalties.

With B of A, theres only one problem with their name. The first letter is wrong, should be a W.

Major banks tend to have their debit cards set up so you *can* overdraft. If you're going to keep the account with them then in the conversation with them about the overlimit fees have some words about some kind of means to stop charging on the card when it actually hits zero. Walkalloverya did it to me some years back - OK it wasn't that many charges it was 3 but enough for me to get noticed. Never again for me. That account gets watched like a hawk.

$450 means more or less to some.

:hi:

I'd say no more allowance either. Make her earn her own spending money.

A job? My god, that's just going too far.

it could be a really cheap valuable lesson. She could learn right now that banks and credit agencies are not your friends and should only be dealt with when and if one is capable (and willing to spend the effort) of using extreme caution with them. If she learns from this experience, she will get off cheaper than many have.

Keep in mind it's about accountability, not anger. Keep the focus on need to pay off the charges she incurred, not on family drama.

I'd refuse to engage emotionally in it so she doesn't reduce it to "a family fight" - no yelling, and try to stay more zenlike in the approach. "Yep, this sucks for you, but you knew the fries were going to cost 40 dollars, and you decided to buy them."

then she can work with the abstract notion of electronic money.

Giving her card back is irresponsible at this point.

No electronic media for either of them for a month. That includes TV, internet, cell phone/text, radio/music/i-pod, video games or cinema.

are the things that we should ALL know about them, because they are policies that create excessive fees charged to those least able to afford them.

1.) With the exception of Nevada, banks in all other states are allowed to post the day's deductions from largest to smallest. This doesn't seem like a big deal on the surface, and they explain it away that they do this so that "the important things--like mortgage payments, car payments, etc--are deducted first". This sounds reasonable until you consider what a small calculation mistake could cost you.

For example, say you have $500 in your account. You have deductions (written checks, automatic electronic payments, debit-card transactions) taken during the night's business in the amounts of $295, $110, $41, $33, $27, $18 and $11. Under the 'largest to smallest' scheme, you would draw 3 overdraft fees, because the $27 transaction would be th first to go over, with everything snowballing from there. Deducted from smallest to largest, your account would still be overdrawn, but you would only receive 1 fee. This doesn't even take into account the fees the account holder will be liable for with merchants holding these "returned NSF" items, which are just as much as the bank's fees.

2.) When you use a debit card, the money is not taken out of your account immediately. There is a temporary hold placed on the funds, presumably until the merchant submits his/her batch of electronic payments at the end of the day. These 'holds' usually expire within 24-48 hours, and for large companies (think MallWart or McDonald's), the funds are usually disbursed long before the holds expire.

But what about small mom-and-pop stores and other small businesses who may not ship their transaction batches on a daily basis? If the hold expires before the payment is requested from the merchant, the owed money may once again appear in the 'available balance' of the account-holder, until of course the merchant does actually submit his payment batch. If the account-holder 'forgets' about a purchase (i see tons of people who NEVER write down their debit-card purchases in their bank-book, or even take their receipts with them), and re-spends the money, the original merchant will still be paid (the authorization code they got at the time of purchase guarantees payment), but the account-holder will be charged with an overdraft fee.

This is just FYI stuff, courtesy of someone who worked on the inside.

Seriously.

I only got hit with that once and then I called and said if the money isn't htere the debit card is to not work