I found an interesting graphic regarding overdraft charges linked on digg this morning.

While I try to leave personal stuff off LG, I’m going to share a little story with you.

There is a law student whom I know — Let’s call him Kosh (that was meant to be a joke name, but it occurs to me that it is also the name of the ambassador from Babylon 5).  Kosh sells his used law books via Amazon every semester and uses Paypal to print USPS MediaMail labels.

On one particular occasion, Kosh forgets that his Bank of America balance is running low because he now lives in State College, where there is no Bank of America to be found.  As a result, he prints three labels, one of which causes his account to overdraft.  The following infinite loop commences:

1.  BoA charges a $40 overdraft fee for each charge.
2.  Paypal sees that it was declined, waits a few days, charges again.
3.  GoTo Step 1

Somewhere in the 3rd or 4th iteration, Kosh notices that this is happening, he calls up Bank of America to demand that they stop processing Paypal charges.  They say that they can’t do that.  Kosh tells them to close the account.  They say that they can’t do that while the account is at a negative balance.

Kosh calls Paypal and explains exactly what is going on with the infinite loop.  Paypal says, “Oh really?  You’re right!  I just tried to charge your bank account and it didn’t work!”  Kosh exclaims, “Haven’t you been listening to anything I just told you?  You just cost me $120!”

So when Bank of America finally closes Kosh’s account due to his refusal to pay, the balance sits at a lofty $800 as a result of a $3 MediaMail charge.

Anyway, given the above image, maybe this occurrance should be no surprise.

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