I-Team: Banks cashing in on overdraft protection charges - FOX 29 News Philadelphia | WTXF-TV

I-Team: Banks cashing in on overdraft protection charges

Posted: Updated:

Conventional wisdom is that if you opt into your bank's overdraft protection plan, then you will save money.

But, I-Team's Dana Fowle recently saw a study that says that's not necessarily the case. And, don't worry, you aren't the first person to scratch your head over what you're about to read. But, a government watchdog group says it's very, very true.

Banks offer overdraft protection for ATM withdrawals and debit card purchases.  But, the Consumer Financial Protection Bureau says that safety net is expensive.

The group looked at bank overdraft protection plans and found them complex, confusing and loaded down with fees.  One example: If you have the protection, you can still get cash at the ATM when you're overdrawn.  But the bank will charge you- on average - $30 or more for the overdraft.

The study says it's a big moneymaker for the banks - accounting for 61 percent of charges on checking accounts for some banks.  If you don't have overdraft protection and your account is on empty and your account is on empty - well - you can't get money, but you also aren't charged a fee and you don't get yourself into debt.  

The study found there many ways banks tack-on charges when you dip into that overdraft protection.  So, the smart advice: Before you spend more money than you have, find out from your bank how much that convenience is going to cost you.  

The report reviewed a six-month period and found is customers were chronic overdrafters – and did not have overdraft protection for ATM or debit transactions – they saved $450 in insufficient fund costs.

More Info:
Consumer Financial Protection Bureau: Consumer Financial Protection Bureau launches inquiry into overdraft practices
Here's a look at a prototype penalty fee box

  • I-Team Story ArchiveMore>>

  • Unresolved bank errors? Help is on the way

    Unresolved bank errors? Help is on the way

    Monday, July 28 2014 8:11 AM EDT2014-07-28 12:11:30 GMT
    Taking on a big bank, even over something like a minor bank error, can be maddening. You feel like no one is listening. It's like being trapped in a maze you can't get out of, but somebody is noticing how frustrating that can be.
    Taking on a big bank, even over something like a minor bank error, can be maddening. You feel like no one is listening. It's like being trapped in a maze you can't get out of, but somebody is noticing how frustrating that can be.
  • I-Team Investigation

    Former Douglas Co. D.A. office manager indicted

    Former Douglas Co. D.A. office manager indicted

    Sunday, July 27 2014 3:24 PM EDT2014-07-27 19:24:49 GMT
    There are major new developments today in the state investigation of the Douglas County District Attorney's office. Tammy Agan, the former office manager, has been indicted on 58 counts of theft and making false statements.
    There are major new developments today in the state investigation of the Douglas County District Attorney's office. Tammy Agan, the former office manager, has been indicted on 58 counts of theft and making false statements.
  • Whistleblower Seeks Sanctions Against Attorney General's Office

    Whistleblower Seeks Sanctions Against Attorney General's Office

    Friday, July 25 2014 9:59 PM EDT2014-07-26 01:59:29 GMT
    In a letter, obtained exclusively by the Fox 5 I-Team, former Ethics director Stacey Kalberman's plans to seek sanctions against the state Attorney General's office.
    More controversy involving the State Ethics Commission. In a letter, obtained exclusively by the Fox 5 I-Team, former Ethics director Stacey Kalberman's plans to seek sanctions against the state Attorney General's office.
  • Contact the FOX 5 I-Team

    * denotes required fields

    We're sorry, but only one entry is allowed per person.
    Thank you for your continued interest.

    Thanks for contacting FOX 5.  To reach our newsroom by phone, please call (404) 898-0100.

Powered by WorldNow

WTXF-TV
330 Market Street
Philadelphia, PA 19106-2796

Phone: (215) 925-2929
Fax: (215) 982-5494

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices