Most people think an ATM transaction will be denied if the account has insufficient funds, but that’s not always the case.
Many consumers are not aware the banks will often allow withdrawals when the money is not there – and customers later find that they’ve been hit with an overdraft or insufficient funds fee.
It’s easy money for banks.
Nationally, banks collect nearly $8 billion in annual fees from overdraft fees associated with debit card and ATM transactions.
The average overdraft amounts to $17, and the median fee for overdrafts is $27.
The Consumers Union has submitted a proposal, asking the Federal Reserve Board to require banks to have the permission of customers before signing them up for high fee overdraft loan programs.
The Fed is accepting public comment until March 30.
To share your opinion, visit http://cu.convio.net/OverDraft