The Consumer Financial Protection Bureau (CFPB) released a report on consumers’ experiences with bank overdraft programs.
Overdraft programs let people make payments or take withdrawals from a checking account when they do not have the funds to cover it. They are charged fees, however, for doing so.
To learn more about what people think about these overdraft protection programs, the CFPB polled 88 people who had recently been charged an overdraft fee or had a transaction stopped because they didn’t have enough money to complete it.
Participants noted both benefits and drawbacks of these programs. However, all participants were concerned about high overdraft fees. Regarding the fees, the respondents said they were uncertain about overdraft policies and fees and why they differed across types of transactions.
Others were unsure about the timing of deposits being credited to their accounts, thinking they had enough to cover the expenses.
CFPB offered some advice to people looking to avoid overdraft fees. One is linking the checking account to a savings or another account. The bank will pull money from that account if the customer does not have enough in checking.
CFPB also said that many consumers did not realize that they can opt out of overdraft programs on debit card purchases and ATM withdrawals.