Attack of the Overdraft Fees: Logan's Story

Overdraft fees are truly small, high-cost loans made by banks or credit unions to an account holder who is "in the red," often without the account holder's consent. The bank recoups the loan amount, plus a fee averaging $34 from the account holder's next deposit.

Often marketed inappropriately as "bounce protection," the abusive fee-based overdraft loan should not be confused with cheaper sources of back-up funds for checking accounts. These loans can make a small purchase, even a sandwich or doughnut, cost the unsuspecting bank customer over $30, and they can trigger a domino effect of debits that leaves the customer struggling to climb out of a negative balance.

What are overdraft fees abusive?

Banks can often increase the number of overdrafts, through practices like clearing high-dollar debits before subtracting smaller debit amounts, holding deposits longer than necessary, and failing to decline overdrafts or warn customers at the checkout or ATM if they have insufficient funds.

How does this impact you?

Almost half of all overdrafts (46%) are triggered by debit cards at the ATM or the point of sale. Most of these debit point-of-sale overdrafts are small, averaging less than half of the $34 fee, meaning that the overdraft loans can cost nearly $2 for every dollar advanced to cover the shortfall.

What can you do to avoid overdraft fees today?

•Switch: If your bank or credit union will not let you opt out of a system that automatically approves your overdrafts without warning, for an average $34 fee per incident, switch to another bank or credit union.
•Link: If you can, link your checking account to a savings account or line of credit, which can be available at annual interest rates as low as 18 percent.

What else can you do?

Share your story with the Federal Reserve. Right now, bank regulators and Congress would like to hear from hard-working Americans affected by unauthorized overdraft fees. Specifically, they would like to know if the clear option to Opt-In to overdraft protection programs would be helpful to consumers.




Share your story today and end the attack of the overdraft fees.

Category:

Nonprofits & Activism

Tags:

• overdraft fees
• overdraft charges
• bank abuses
• bank charges
• bank fees
• affected by banks
• affected by overdrafts
• bank bad practices
• predatory lending
• banks hidden fees
• banks
• consumer stories

[misticmagoffin]

it has long since been proven that banks alter account information to deliberately cause people to incur overdraft fees through the use of software programs - at no time should an account balance go up unless there has been a cancelled transaction or a deposit. - this is documented science

[nigelgst]

Like Michael Moore movies, I think this is a bit overdone, but the theme is absolutely correct. Banks and credit cards have made a fortune from those who are "on the edge" financially. It's poetic justice to see them suffering now.

[Fleeced247]

Meinyay - If a bank is authorizing a payment that you do not have the funds to pay for at the point of sale...Essentially they are signing you up for a loan.

a 35$ loan on an 88 cent transaction would make a loan shark blush.

Like any other loan agreement, you should have the right to decline or accept depending on the circumstances.

Currently you do not have that right to make that choice at Wells Fargo and that is straight up thievery. Also by law they should state the terms of this "loan"

[rap112856]

I feel your pain i my self no longer bank and no longer use credit cards i declaired self bankrupsey you know get cell phone change address to po box buy only what i can afford no credit, the credit and loan game is designed to trip you up and rip you off ,so why in gods name would i get mixed up with a bunch of money manipulating scam artist corperations.

i don't need a new car or house or any of the other new big ticket items to show off ,I'm not a shallow person,but I'm now a happy person.

[BubPZ]

Take your business elsewhere and educate yourself on these shady practices.

[treyatl2006]

Thats partly true! The reason why I say its partly true is because Ive been with BOA for a while now. They are not the same bank I signed up w/. They have different fees now than what I agreed 2 because their tos states they have the right to change or add to the tos. Some of the things that changed are: overdraft fees on pending items, extended overdraft fees, increasing monthly fee 4rm 4.95 to $9, clearing larger purchases first before clearing smaller purchases. None of that went on 5 yrs ago

[Meinyay]

I agree that overdrafts do suck but unfortunately, when you say that you did not agree to it when you signed up for your account, that is untrue. When you sign your signature card, there's a lot of small print on it. Part of that small print says "I agree to the bank's schedule of fees". Part of that schedule of fees is... overdrafts. It's a contract. You signed it. Only way out of it is to close your account I'm afraid.

[lovelife612]

AMEN! fuck i got 105 dollar one today.

[TheMeltinJohnShow]

I had this happen today. Id like to talk to some people to see how they went about this.