Community | October 06, 2009 | 14 comments

Study: Explosion of bank overdraft fees in US, up 35% from 2008

source: http://rawstory.com/news/afp/Explosion_of_bank_overdraft_fees_in_10062009.html

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WakeUpPeople
US banks billed their customers 24 billion dollars in penalty fees for overdrawing their accounts last year, a 35 percent increase over the previous year, a study has found.

Rather than deny payment, most banks in the United States routinely approve transactions not covered by funds but charge customers an average fee of 34 dollars each time.

Fees are charged whether the overdraft is for five dollars or 50 dollars, under overdraft protection programs in which customers are automatically enrolled, the study found.

"Overdraft fees are most typically triggered not by checks, but by debit card transactions and ATM withdrawals that could easily be denied for no fee," said the study by the Center for Responsible Lending.

"These practices are especially alarming given that institutions automatically enroll consumers into this type of program, even when lower-cost forms of overdraft protection -- such as a formal overdraft line of credit or a link to a savings account -- are usually available," it said.

Some 51 million account holders have been billed for overdrafts at least once a year, and 27 million of them have been hit with the fees at least five times in a year, the study.

In 2009, experts expect fees to grow to 27 billion dollars.

Lawmakers have introduced a bill in Congress that would require banks to change their policies to allow consumers to decide whether or not to enroll in overdraft protection programs.
  1. groups:
    Community,   Current Tonight,   Economy,   US Economy
  2. tags:
    News,  News and Politics,  US News,  overdraft fees
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14 comments // Study: Explosion of bank overdraft fees in US, up 35% from 2008

  • krush_productions
    • 0
      krush_productions  

    • This is why I have never had a bank account. I ran into a friend outside of his bank, he was livid. He shoved his account statement into my face and said, where do you see the negative balance? Not on there. He had been charged with two $32.00 overdraft fees on his account with quite a healthy balance (unlike my piggie bank). He closed his account, and I don't blame him.

    • 2 years ago
  • Chheang
    • 0
      Chheang  

    • Wait... you have to SIGN up for a savings account and you have to sign forms (electronically or hard copy) to open the account. Additionally, the forms clearly state that the bank will bend you over if you spend more than you have money in the bank. Where have we come to blame someone else / an institution for our own flawed behavior?!?!?! I've screwed up 1 time with WAMU and trust me, I watch my account like a hawk now. And you know what, I found someone to blame for that $20 overdraft fee... MYSELF!

      Now for those of you who think it's a scam... don't use your debit card! Need to spend money? Go to the bank, withdraw from you savings account and spend in cold hard cash. Every visit will inform you about your balance first hand.

      Stop the b*tching and take responsibility for your actions.

    • 2 years ago
  • RaceBannon
    • 0
      RaceBannon  
    • Chheang:

      put it this way if you have 10 dollars cash in your pocket there is no such thing as "over drafting" if you try to spend 11 dollars. Simply you'll throw your hands up in the air and realize you don't have 11 dollars to spend.

    • 2 years ago
  • jubal
    • 0
      jubal  
    • Chheang:

      Charging the fees is a gimmick to rape more money out of customers. They could easily have the computer decline the spending if the person exceeds their balance.

      Most people don't run around keeping a ledger on their ATM transactions. They are taking advantage of that fact by charging their fees.

    • 2 years ago
  • krtwils
  • bc_f
    • bc_f [removed]  
    • This comment was removed as a violation of community guidelines.
  • jubal
    • 0
      jubal  
    • bc_f:

      Don't get caught up in the illusion, paper money is just as worthless as electronic money. Its called FIAT currency. Its a symbol for exchange, it has no value.

    • 2 years ago
  • Gravity_Man
    • 0
      Gravity_Man  

    • Banks have good memories. In the late 1970's they started hiking overdraft fees. They hold it back like a card up their sleeve. mm, seems like back then Virginia passed a law to stop it, so I guess they found a LOOPHOLE.

      Money is an evil loop, the opposite of my engine systems. Get rid of the money you get rid of corruption use my engines you enter the Age of Inexhaustible Fuel Supply. I've been in contact recently with some fellows who have made systems similar to mine only mine are physical and theirs are electrical, but the loop is similar.

      They are managing to capture rebound emf (Back-bounce of electromotive force). So many, many solutions and they all seem to just pile up on a stack where no one can have them. That's real sad. Anyway, money has to protect money, and banks, they are both Hammer & Sickle.

      They hammer ya and they also reap ya.
      They hammer ya and they also reap ya.
      They hammer ya and they also reap ya.

    • 2 years ago
  • timetide
    • 0
      timetide  

    • then there is the ever so lovely "non-use" fee. This is where the bank charges you a $10 a month fee for not moving money in or out of your account, and failed to mention it to you.

    • 2 years ago
  • jubal
  • maof4brats
    • 0
      maof4brats [removed]  

    • They get our money with the stimulus money that Bush gave them and then we get the shaft again. For what?So their CEOs can get millions of dollars. I don't think
      ANYBODY works hard enough to make millions of dollars. This is crap!

    • 2 years ago
  • jubal
    • 0
      jubal  

    • If the money isn't there the transaction should simply be denied. Charging the outrageous fees they do is usury and should be outlawed.

    • 2 years ago
  • neocongo
    • 0
      neocongo  

    • Incredibly shitty they can charge you an overdraft fee on an ATM card rather than have the machine tell you "Insufficient funds." Damn thieves.

    • 2 years ago
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