Complain about a product or service

Direct Merchants Bank

Disappearing Funds

Direct Merchants Bank •Application Fees •Change of Address Policy •Collection Policies •Customer Service •"Credit Protection" •Interest Rates •Late Fees • Late Posting of Payments •Over-Limit Fees •Preying on the Disabled • "Rate Reward" •Secured Credit Cards •Security Policies •Disappearing Funds •Telemarketers •An Insider's View

Lora of Greenwood AR writes (2/19/03): I deposited a cash advance check from Direct Merchants Bank for $3000 into my checking account at Farmers Bank on 12-18-02. This charge appeared on my Direct Merchants card on 12-19-02. Farmers Bank did not receive the funds for this check and contacted the Federal Reserve Bank. FRB said it was a "lost item" and instructed Farmers Bank to send an indemnified copy, which they did.

When the FRB sent this copy to Direct Merchants, instead of reporting to the FRB that this was a "paid item", they attempted to charge another $3000 to my credit card account, which of course put me over my credit limit, so they returned it NSF and charged my account a $15.00 fee. When Farmers Bank received this check back marked "NSF", they charged the funds back to my account.

I spoke on a conference call to Sandy at Farmers Bank and Customer Service at Direct Merchants. Direct Merchants assured us both that if Farmers Bank would fax copies of this documentation to them, it would all be straightened out. Based on this promise, Farmers Bank redeposited the funds into my account. Over the course of the next few weeks, Farmers Bank sent this check in to be cashed and Direct Merchants sent it back "NSF"(and charged me a $15 fee each time) no less than six times.

Farmers Bank has now given up and has removed the funds from my account again. So. Here I am with a $3000 cash advance charge on my credit card that has been accruing interest since 12-19-02, but I don't have the funds!

My various attempts to correct this problem have included: Several calls to customer service (they can't help). The most they could do was send a request to their research department. This resulted in my receiving a copy of the cancelled check from DM Bank to me. Another time I was told to have Farmers Bank fax copies of this information to 410-248-4231. We did this. Two weeks later (1-24-03) I called customer service and insisted on speaking to someone further up in the chain of command and reached Sheryl G (very pleasant woman, who gave me her direct phone number) who made some calls and said if I would have Farmers Bank fax a "collection letter" this would all be corrected. We did this also.

I have also emailed the details of this problem using their online customer feedback screen. This did result in four of the $15 fees being reversed. It also prompted two calls to me (which I missed) from DM where they left a voice mail telling me that the problem had been resolved and to please return their call at 800-435-1415. Ha! When I call this number, I follow the automated instructions and enter my account number, then I'm told "Your account is up to date. If you need further assistance, call customer service." In the meantime, the check was returned two more times and I was charged another two $15 fees. After that is when Farmers Bank gave up and charged the $3000 back to my checking account. My final attempt was made Tuesday, 2-17-03. I called Sheryl G. She instructed me to fax all this information again. Which I did. Still no response.

Direct Merchants Bank has charged me $30 in NSF fees that has not been refunded. I have been charged interest on $3000 since 12-19-02 (but have not received the funds). When DM first returned this check NSF and Farmers Bank first charged it back to my account, it caused several of my personal checks to then be returned NSF. Farmers Bank has kindly reversed all of the NSF fees that they charged.

Two checks written to my local grocery store were returned. The grocery store kindly removed the $50 in NSF fees that they charged me, however, this was very embarrassing and now when I make a purchase with a check at their store, a manager has to come override the cash register. A check to CitiCards bounced which resulted in charges of $58. A check to Alltel bounced resulting in a $25 NSF fee. A check to my chiropractor's office bounced, causing embarrassment only (they reversed the charges). Plus, I have spent approximately 20 hours of lost work time (at $16.50/hour) on phone calls, letters, and chasing down NSF checks around town.

Direct Merchants Bank NA is a national bank and thus falls under the jurisdiction of the Office of the Comptroller of the Currency, U.S. Treasury Department. We would suggest that Lora send an account of her problems to the OCC's customer assistance department -- Customer.Assistance@occ.treas.gov.

Jason of Wayland MI (2/4/03):
Two things happened. 1st. DM bank sent me a check for $500 credit in the mail with my statement. I cashed it. A few months later I found out that it had bounced. I had to pay my local bank back that money. Now, I wasn't keeping the closest track, and I didn't save my statements, but I'm fairly certain that the $500 was also charged to my account with DM bank.

2nd. My account became maxed, and it was hard to keep up with. Many times I would make payments that put me a hundred dollars or so under the limit, but when I received my next bill verious finance charges would always put me back over the limit, and then I would be assesed another over limit fee ($39).

Well, fortunately my parents loaned me the money to pay this crazy thing off. I paid the full amount due (about $4000) on time. However, the next month I still recieved a bill in the mail for $37 in finance charges and another $39 over-limit fee! They had sent me a letter two months earlier saying my card was cancelled, I don't understand how they can continue to charge me fees after my card was cancelled and I paid my entire bill.

When I tried to gain an understanding of what was going on by talking to customer representatives of DM bank, I found them rude and unhelpful. I have learned that using a credit card can easily result in paying for things three times. I will not be getting another credit card anytime soon.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.