Much of my career has been serving financial institutions, including working as CEO for a leading consulting firm in the banking industry. Working in the financial sector has forced me to become aware of the unfairness behind overdraft fees. On one hand, banks tell consumers they are protecting them by providing an overdraft option or ‘cushion’ for possible transaction overflow, yet on the other hand they charge these same consumers for the very mistakes they are trying to compensate for.
Because of this unfairness, I have made it my responsibility to share information and tips to consumers on how to avoid overdraft and how to obtain a refund from overdraft fees collected. Through this blog and website, I offer free professional advice and insight.
Why the website? Because overdraft fees are unfair and outrageous and you should not have to pay them. It is really that simple. I don’t believe in waiting around for government action when there are actions that can be taken today to get money back from overdraft fees.
There are steps you can take today to obtain an overdraft fee refund and never pay overdraft fees again. With debit cards and all the ways we purchase today, it’s not an easy option just to keep plenty of money in your account or budget to the penny. Accidentally spending more than is in your account is occasionally going to happen for many of us.
Below are reasons why you should not have to pay outrageous overdraft fees:
- The fee charged is at least 10 times the rate over the cost the bank pays. We all believe in a business making a profit, but this is gouging. Banks offer “free checking” to most customers and pay for it by gouging a few. You are paying the fee for everybody else.
The cost of $30 or more for a service that costs approximately $2 or $3 is absorbed and unfair.
- Bank policies are designed to create overdraft fees without your approval. Banks today regularly set up policies without inquiring with the consumer first. Policies include fees for accounts with $500 or less, and even approving debit transactions when funds don’t exist in your account! If they would just decline the debit transaction no fee would be incurred Many large banks even charge a fee before a debit transaction clears so your balance may never be negative but you still get a fee!
Why do you think banks have spent years promoting and making the debit card the preferred payment choice by busy consumers today? Further, today with Check 21, payments process immediately but banks have the right to delay your deposit for days. And finally, banks charge the highest payment first which increases overdrafts by 20% or more on an account.
The practice of designing policies and services to increase the hidden cost of a service is unfair.
- They blame it on you, but you have limited choices. So if overdraft fees are unfair, why don’t we consumers use another payment service? Because alternatives are limited – until recently (see recommendations below). The system is set up to generate the fee, not help us avoid the fee.
Its unfair to blame the customers for the fee when the financial system is set up to generate the fee and no real alternatives exist.
Just to compare what some industry experts say, here are the comments of an “expert,” Dr. Don on Bankrate.com. Dr. Don believes that banks do not claim that overdraft fees are fair, but they simply can get away with the fees.
“…The fees aren’t based on what it costs the bank to manage or monitor the overdrafts, although they do need to cover that cost. It’s not about fair (our bolding added). Unfortunately, the people who can least afford these fees are the ones most likely to get hit with them.”
So what can you do? Well, as of today, a lot! I have put together a list of things you can do to avoid overdraft fees in the future. While there are other websites that can help you petition Congress or seek regulatory change (and these are worthy efforts) don’t hold your breath to see change right away. My approach is to give you tools you can use NOW to stop getting charged for using your money.
Here are some sections of my site to help you get started:
Best ways to get that overdraft fee refunded…click here.
How to never pay an overdraft fee again….click here.
Document your experience! How you can best help yourself and others …click here.
Join our forum discussion with questions or help for others…click here.
Chances are you’re frustrated with the bank and overdrafts. Take a second to laugh at some funny clips about overdrafts…click here.
