Can I Dispute a Below-Maintaining-Balance Penalty?

Someone asked about below-maintaining-balance penalty here on our blog

Hi po,
The below maintaining balance penalty, can this be disputed? Especially if you were not informed about it. Where do you see this information about the penalty? Is it on the application form? Thank you.

Our reply:

Yes, you can dispute it.
But if you were penalized for just one month or two months (300 pesos or 600 pesos), I think it’s not worth your effort and time. Now that you’ve come to know about this penalty, just accept that there’s such a thing as below-maintaining-balance penalty, and banks are authorized to charge it, and remember it, and then fix your account.

How to fix your account?
Deposit more money into your account, and maintain the required minimum maintaining balance.

Or you can close your account (withdraw all that you can withdraw via the ATM, or you can withdraw up to the cents and few pesos over the counter), and open an account with a lower maintaining-balance requirement.

BPI Easy Saver is one account that has zero maintaining-balance requirement, but it charges 5 pesos for every ATM withdrawal and every balance inquiry.

Why Is It Not Worth the Effort to Dispute?

The disputed amount is small. It’s not worth your time, your effort and your stress. Besides, the bank will always win.

The requirement to maintain the minimum monthly average daily balance (MADB) in your account is stated in your bank’s Terms & Conditions. You signed this document when you applied for your account.

 Here are excerpts from BPI and BDO’s Terms & Conditions (Other banks have similar Terms & Conditions):

Excerpts from BPI Terms & Conditions for all its products, services, facilities and channels:

8. Minimum Account Balance 

You shall maintain account balances at the agreed/required monthly average daily balance (ADB) computed as follows:
ADB = (Day 1 ending balance + Day 2 ending balance …+ day 30/31 ending balance) /
(No. of days in the month i.e. 30/31 days)

You acknowledge that you are at all times aware of the required minimum monthly ADB, the service charges, maintenance fees, dormancy fees and penalties applicable for various types of Accounts, products, services, facilities and channels, as the case may be, as well as any amendments, revisions or modification thereto, which fees, charges and penalties are available to you upon request or through various channels of the Bank or are published, displayed, advertised, posted in the ATM on-screen messages or such area near the Bank’s ATM or in conspicuous places within the Bank’s premises and/or posted in the Bank’s website, whichever is applicable, all of which are made integral parts hereof.

The Bank may impose and collect service charges and/or maintenance fees on Accounts, whether active or dormant, where the Account balances: (i) have fallen below the required minimum monthly ADB, for dormant accounts; and (ii) have fallen below for at least two (2) consecutive months, for active accounts. Any Account with zero balance, regardless of status, may automatically be closed by the Bank without notice.

Excerpts from BDO Terms and Conditions Governing Deposit Accounts

I. Opening of Accounts

The Depositor shall maintain the required Average Daily Balance (ADB) as the Depositor
may be notified by BDO from time to time. A service fee shall be charged if the account
falls below the required ADB.

VII. Service and Other Bank Charges

BDO is authorized to collect from the Depositor all applicable service charges, penalty
charge and other fees the account may incur. BDO reserves the right to impose new
service and maintenance charges and change existing charges from time to time within
the limits allowed by law or pertinent regulations.

BDO, without need of prior notice, is authorized to deduct all such charges and fees from
the account without incurring any liability therefor not limited to any loss, damage,

or expense arising from or in connection with the dishonor of checks, drafts, notes or
other instruments because of insuffi cient funds as a result thereof.

Another thing: The bank officer who assisted you in opening your account will always insist “I told you about it. We always inform our new account owners about maintaining balance requirement,” even if she/he forgot to warn you about below-maintaining-balance penalties.

This is the BSP regulation about maintaining-balance penalties:

Sec. X263.  Service and Maintenance Fees

Banks may impose and collect service charges and/or maintenance fees on savings and demand deposit accounts, whether active or dormant, that fall below the required minimum monthly average daily balance (ADB), subject to the following conditions:

a. the imposition of such charges or fees is clearly stated among the terms and conditions of the deposit;
b. the rate or amount of such charges or fees is properly disclosed among the terms and conditions of the deposit;
c. the deposit account balances have fallen below the required minimum monthly ADB for dormant accounts and for at least two (2) consecutive months for active accounts;
d. the required minimum monthly ADB of deposits are properly disclosed among the terms and conditions of the deposit

When Is It Worth It to Dispute a Below-Maintaining-Balance Penalty?
When the amount is in the thousands, and
when the penalties arose from a change in the minimum maintaining-balance amount, and
your address in your bank records is still your current address, and
you never received a notice declaring a change in the minimum maintaining-balance-amount.

BSP requires that you must be notified in case of changes in the minimum maintaining balance, so you can use this in your complaint.

I have a post here on how to file your complaint disputing your below-maintaining-balance penalty.

What Is Maintaining Balance or Monthly Average Daily Balance (MADB) in Bank Accounts?

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