There are many reasons why this happens, and one is merchant error. Overdraft may occur if a retailer debits an account by mistake. For example, the client authorizes a payment of $10 which is posted as $100. In this case, the account holder can use chargeback to get his money back. There are other reasons why holders may be overdrawn. These include bank error, authorization holds, and return check deposits. With authorization holds, funds are transferred from your debit card to a retailer. Authorization is required to complete the transaction, with funds released by your financial institution. The hold will fall off in 1 to 5 days, but the funds won’t be available in the account. The problem is that retailers are not allowed to cancel transactions in many cases. Even if cancellation is possible, the money is still held for up to 5 days. If you or a merchant swipes your card twice by mistake this will result in a double hold. Other reasons for overdraft include electronic withdrawals, short-term loans, fraud, playing the float, and bank fees. Withdrawing more money from an ATM than what is available in the account often results in penalty fees. This is possible if your financial institution has your consent. The account holder is allowed to revoke the service and is offered a notice that describes the conditions.
Read more at: Overdraft as a Handy Facility or a Protection Racket - Financialized.com
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