Bank Overdraft Fees in Massachusetts Will Not Stop with New Opt-in Rules

National and local banks in Massachusetts, New Hampshire and other states have been charging consumers excessive overdraft fees on debit transactions by manipultaing the posting of debit transactions from the highest debit to the lowest debit.  This re-ordering of debit transactions depletes available monies in an account the fastest, resulting in multiple overdaft or NSF fees when the lower debit transactions are posted last and out of turn.  The average overdraft fee is reported to be $34. 

In an attempt to solve this problem, the bank regulators are requiring banks to obtain "opt-in" permission from their customers before they charge an overdraft fee.  For example, if you are at a department store about to make a debit purchase, your purchase would be rejected if you did not opt-in to the bank's overdraft protection plan.  You may suffer a brief moment of embarassment but you would be charged no fee.  If you opted in to the bank's overdraft protection plan, you would have essentially permitted the bank to authorize that purchase and charge you the fees outlined in its overdraft protection plan. Even if that purchase, which would have been rejected without the opt-in, is for a cup of coffee worth $2.

Consumers should think long and hard before opting in to any bank overdraft protection plan.  The costs of opting in will far exceed the fifteen seconds of embarassment suffered when your debit card is declined at the register.

Phillips & Garcia are consumer protection lawyers licensed in Massachusetts who are reveiwing consumers' overdraft fee complaints against banks in an effort to file class actions for refunds and changes in banking practices.  Fill out our website contact form if you have an overdraft fee complaint that you want reviewed.