USA Today reports that analysis done by the paper shows the 10 largest banks in the country allow customers to overdraw on checks, at ATMs and when paying with a debit card.
According to estimates from Moebs Services, Americans will pay some $38.5 billion to banks by the end of this year because of these fees. The paper points out that the $20.5 billion which is expected to be paid for fees related to credit cards pales in comparison to these overdraft fees.
One questionable tactic from banks is their practice of clearing larger payments first, which can often cause a number of smaller purchases to cause numerous overdraft fees.
This practice caused Ken Vollmer of Georgia to sue Wachovia after he accrued hundreds of overdraft fees when his charges were cleared by the bank from largest purchase to smallest. Vollmer alleges that the bank “purposely structured transactions to make money,” an accusation Wachovia told USA Today it would “vigorously defend” itself against.
Experts predict that banks will continue to increase the number of fees consumers pay as they attempt to increase their bottom lines, with many trying to get the increased fees in place before credit card reforms going into place.
Michael Moebs, the founder of research firm Moebs Services, says the increases in these fees across credit cards and other financial services is unprecedented.
“We’ve never seen a price increase during a recession,” he told the New York Times recently. “What the bankers are saying is that I want to maintain my revenue.”
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