Overdrawn? Posted by Michelle at 07/06/07 05:23 PM

If overdraft fees enrage you, you’re not alone. Karney Hatch has written and directed a “feature-length documentary film exploring the predatory lending practices of the major national banks.” The movie will be premiering at the Clinton Street Theatre in Portland on August 2 called “Overdrawn! The Documentary.”

A 2005 Center for Responsible Lending study found that checking account holders pay $10 BILLION in overdraft fees a year. A subsequent study found that most of these fees are not the result of bounced checks. Instead, nearly half of these overdraft fees are due to POS, or point of sale transactions, like when you go to the ATM or pay for groceries using your debit card.

These “overdraft fees” are actually overdraft loans, oftentimes small ranging from $17-50, provided by the bank. The consumer often takes on this small loan unknowingly and will continue to accrue fee upon fee until the account has the funds. And then add the actual overdraft fee, of about $30.

And chances are, you didn’t sign up for this “overdraft” or “bounce protection” or would like to be forewarned that you will incur a fee when you go to your ATM or use your debit card when you’re trying to access funds that aren’t there. But your bank often doesn't tell you. Why should they when they're making $10 billion dollars a year off this practice?

comments (4)

1 Posted by M at 08/30/07 12:29 PM

If you don't want to pay the fee, don't overdraw your account. Remember, there is no check float anymore, and writing a check on money you don't have in your account is illegal.

Consider setting up overdraft coverage from another account, like savings or credit card. The fees, if any, are much less than OD fees. Also, use bank's on-line banking services to monitor your account balances and transactions daily -- take responsibility for your finances and don't get charged fees.

2 Posted by NEIL HOLVERSON at 08/31/07 08:19 AM

You must keep in mind all the times you have used your debit card. Not all businesses submit their debit card transactions daily. Consequently you can overdraw your account because when a merchant runs your card there are sufficient funds to cover the transaction. Then when all of your debit card transactions hit your account you are overdrawn.

Debit card transactions are the same as outstanding checks. People are responsable for maintaing their chdecking accounts, not the bank! Quit complaining and be a responsable customer.

3 Posted by Mary at 08/31/07 10:36 AM

Being financially responsible is a good thing. But most of us are not perfect. When someone makes an error, their bank should not be allowed to legally crucify them with OD fees! It's as simple as that.

4 Posted by scott cady at 09/02/07 12:20 PM

The banks put through the higher dollar first and multiple time throughout the day to maximize the so called fees. Always trying to maximize the profits even with occasional mistakes and with overdraft protection.