Overdraft fees are unreasonable in virtually every respect, wreaking financial devastation in the lives of those unable to recover from a surge of fees that washes them out when they are most struggling to stay afloat.
Financial institutions typically charge an overdraft fee when a customer’s account lacks sufficient funds to cover a transaction, but the institution chooses to pay the transaction anyway. Overdraft fees are triggered by debit card point-of-sale (POS) transactions, ATM withdrawals, electronic bill payments, and paper checks. The bank typically charges a fee, averaging $35, for each individual overdraft transaction it pays. What's worse, these fees can quickly accumulate, resulting in hundreds of dollars in fees per year.