Signs of Predatory Overdrafts
Unfair Bank Overdrafts
In 2011, consumers paid $16.7 billion in overdraft fees.
Headline: Charges on Debit Card Transactions
Banks and credit unions can simply deny debit card and ATM transactions if there's a shortage of funds, but instead many charge costly overdraft fees.
On debit card purchases, the median overdraft charge is $35 for a $20 overdraft.
Subtracting Largest Debits First
When balancing customer accounts each day, many banks subtract debits in order of largest to smallest dollar amount rather than in the order the transactions occurred. This can increase the number of overdraft fees the banks charge.
Holding Deposits Longer Than Necessary
Some banks hold customer deposits as long as legally allowed, even when no delay is necessary. This can increase the number of overdraft fees the bank can charge by keeping customers in the negative longer, even if they have deposited sufficient funds.