| Most bank customers sign up for new checking | | | | everything in your power to get it removed. This |
| accounts without having a full and complete | | | | feeling can be especially strong if you think that the |
| understanding of many of the account's terms and | | | | overdraft is the result of a deceptive practice on the |
| conditions (Ts&Cs). One of the most often | | | | part of the bank. |
| misunderstood Ts&Cs is that of overdraft | | | | To get an overdraft item reversal request accepted |
| protection programs. | | | | by your bank, try taking these steps: |
| In general, the function of an overdraft protection | | | | 1. Get a copy of your bank statement, either online or |
| program is to allow the bank to cover (pay for) an | | | | in paper form. |
| outstanding debit charge, credit charge or check that is | | | | 2. Find the line item in question by looking at the date of |
| made against a checking account that has an | | | | the transaction that resulted in one or more overdraft |
| insufficient balance to cover the charge. In return, the | | | | fees being charged to your account. These will be |
| bank will charge the customer a fee for this service. | | | | expressed as a debit against your account (shown |
| The fee gets applied directly to the account balance at | | | | with a minus sign, like a withdrawal). |
| the time of the charge, adding to the already negative | | | | 3. Look at the checking account balance shown in |
| balance. | | | | your account on the day and time of the charge that |
| One of the most misunderstood aspects of overdraft | | | | resulted in an overdraft. Was it still showing as positive |
| protection programs on the part of consumers is the | | | | at the time? If so, you may be able to convince your |
| fact that the bank will allow a debit card charge to be | | | | bank that their statement is not clear and that a |
| approved and processed, even if the account balance | | | | reasonable person would have concluded that there |
| is negative! Most checking account customers believe | | | | was a balance in the account at the time. |
| erroneously that the bank will simply reject any debit | | | | 4. Remember that when you call your bank, it is |
| purchase that they try to make if the balance is too | | | | important to be polite and friendly. They get thousands |
| low to cover it. Not so! Instead, the bank will honor it | | | | of complaints every day about overdraft fees and are |
| and then charge an overdraft fee. This simple | | | | ready with verbal ammunition to fire back at you. Their |
| misunderstanding results in billions of dollars of additional | | | | most common ploy: to make it seem like it's obvious |
| income for banks in the form of overdraft fees. | | | | that you made the mistake, not them. But, anyone who |
| Not only are banks in no hurry to dispel this | | | | has seen a typical bank statement knows that they |
| misconception about how overdraft protection works - | | | | are far from clear. |
| many of them actively engage in practices designed to | | | | 5. If you are unable to convince the phone |
| increase the likelihood that multiple overdrafts will occur | | | | representative to reverse your overdraft charge, |
| in the same day, thereby increasing the number of | | | | consider writing a letter to your bank's home office to |
| overdraft fees they earn. They do this by processing | | | | formally register a complaint. |
| first the larger-amount transactions made in a given | | | | Of course, all of this protesting work takes time, and |
| day, then processing the smaller transactions. Doing it | | | | for many of us, time is money. Sometimes, it can be |
| this way increases the likelihood of an overdraft | | | | easier to give up trying to fight your bank about a |
| occurring. The result: as the last few transactions are | | | | given charge, instead opting to switch to a bank that |
| processed, each one can result in an overdraft fee | | | | does not charge overdraft fees. There are banks in |
| being charged. | | | | the marketplace today that will never charge you an |
| If you have noticed one or more overdrafts on your | | | | overdraft fee - even if you overdraw your account! |
| bank statement recently, you probably want to do | | | | |