We had hoped that most banks would follow the lead of Citibank and Bank of America, and not pressure customers to sign up for overdraft protection.
Hah. That was wishful thinking.
The Consumer Federation of America says 13 of the country’s 15 biggest banks – all of them except Citi and Bank of America — are pushing customers to voluntarily sign up for a program that’s costing them $23 billion a year in fees.
Doing so will allow those banks to continue charging fees of $25 or more each time you overdraw your checking account with a debit card.
Banks have routinely signed customers up for these programs unless they specifically asked to opt-out.
But by last fall the public was so fed up with all of the “gotcha” fees banks were charging that the Federal Reserve finally told the banks they had to get customers to “opt-in” to the programs before imposing such fees.
New customers had to be given the choice as of July 1. Existing customers must either sign up or be taken off overdraft protection by Aug. 15.
Citibank and Bank of America said they wouldn’t pressure customers to opt in.
“What our customers told us is that, if I don’t have the money, I don’t want to overdraft” with debit cards, Susan Faulkner, head of the bank’s deposits and card products business, told USA Today.
“We don’t think our customers would come in and opt in” to overdrafts and their associated fees.
That seemed to acknowledge what we’ve seen in survey after survey.
Given a clear choice between paying overdraft fees or having a transaction refused, the majority of consumers say they want the purchase or ATM withdrawal turned down.
But it looks like most banks aren’t going to give up the millions they make on overdraft fees without a fight.
That means you’ve got to resist whatever your bank throws at you – phone calls, letters, pitches from tellers – over the next month.
Warnings that your debit card “won’t work the same” if you don’t accept overdraft protection are absolutely true.
And it’s a good thing.
Saying “no” to overdraft fees is the only rational response.