Payment Card News

Debit Sharks

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Americans might be shocked to know there is a shark lurking in their pants or purses that is striping away billions of dollars annually from checking accounts. A new survey reveals that debit card transactions are the most frequent cause of overdrafts and that these purchases typically are less than the overdraft fee charged. In most cases, banks do not warn customers at the ATM machine or checkout counter if their transaction will result in this fee. The survey by the Federal Deposit Insurance Corp. shows that over half of the large banks surveyed process overdrafts from largest to smallest, which can artificially increase the number of overdrafts fees incurred by consumers. The FDIC found that a majority of banks reported automatically enrolling customers into overdraft systems that impose a
fee. Rules under consideration by the Federal Reserve Board would require banks to give customers the choice of opting out of the expensive, fee-based overdraft program. The FDIC says that artificially increasing overdrafts without a customer’s express consent is unfair. For more grief read the report at “www.fdic.gov/bank/analytical/overdraft/”:http://www.fdic.gov/bank/analytical/overdraft/

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