When consumer protection isn’t
November 13, 2009 | alternatives, industry | Comments (0)This guy makes an interesting point:
There are significant differences between how your local community bank or credit union operates their overdraft program and how megabanks (which are most commonly portrayed in the media) operate theirs. A key difference is communication to consumers. Overdraft protection programs typically offered by community banks and credit unions are fully disclosed. That means consumers get a simple, complete explanation of how the program works, what it costs, how they’ll know they’ve used it, and how they can opt out of the service if they don’t want it. It’s not a secret and it’s optional. These fully disclosed programs typically have tolerance limits that preclude fees for small overdrafts — no $40 cup of coffee. They also have limits on the number of overdrafts customers can have in one day — no $600 in fees because you picked up a few incidentals around town. And they watch out for consumers so they don’t get in over their heads. After all, the purpose of the service is to keep customers.
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