Word: overdrafted
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Dates: during 2000-2009
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Nearly two months ago, this column chronicled a financial misadventure whereby I got stuck paying $70 in overdraft fees to Bank of America because I had overdrafted my account by $6. In case you can’t remember that far back, the mood was outrage. I had been automatically enrolled in a so-called service—of which there is no opting out—that charges $35 for transactions you make when you have no money left in your checking account...
Some senators were agitated, too. There was heavy talk of legislative action starting in September when it was reported that banks expected to draw $38.5 billion this year in “overdraft protection services,” 90 percent of which was coming from 10 percent of checking accounts. It’s the people who can least afford it who subsidize the rest...
Under the Fed’s new regulations, companies must now make debit-card policies—especially fees—explicitly clear through frequent notices to customers, without whose permission overdraft charges can no longer be issued. While these notices have yet to circulate, they are thankfully required to be lucid, clear, and forthcoming with the full extent of policies regarding fees. We hope that these new measures will have their desired effect and reduce the exploitation so common under previous card-company policies...
...system requires banks to clearly explain overdraft charges to their consumers, and it also requires permission to offer the service in the first place. Requiring permission will make the customer a more active participant in the process of acquiring and, yes, understanding the use of a debit card—an essential step in liberating huge numbers of Americans from the confusion that has all too often translated into customer abuse...
Indeed, these banks ought to acknowledge that the government saved them. For starters, they ought to stop gouging the vulnerable among us with overdraft fees and credit-card games. "Reform" is supposed to take effect early next year, but banks have accelerated their gouging since the legislation passed...