Browse releases

By date

September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
February 2007
January 2007
December 2006

Media Resources


Release Date: 11/16/2010

Consumer Reports Poll: Only 22 Percent of Bank Customers Have Opted-In For Debit Card Overdraft “Protection”

Large Majority of Consumers Want Right to Choose Whether to Be Covered by Fee-Based Overdraft Programs for Checks

Two months after new federal regulations started requiring banks to get their customers’ permission before signing them up for costly debit card overdraft programs, a national poll by the Consumer Reports National Research Center has found that only one-fifth of  consumers holding an ATM or debit card have chosen to opt-in.

The poll found that 22 percent have signed up to have their ATM/debit card transactions covered for a fee if they don’t have enough money in their checking accounts to cover them.  A large majority of poll respondents said they wanted the same right to choose whether to be covered by fee-based overdraft programs for check transactions.

“Now that banks are no longer allowed to automatically enroll customers into high-cost debit overdraft loan programs, the vast majority of consumers are saying ‘no thanks.’” said Pam Banks, Senior Policy Counsel for Consumers Union, the nonprofit publisher of Consumer Reports.   “Consumers shouldn’t opt-in to high-cost overdraft loan programs because there are more affordable options available when checking account funds fall short.  Bank customers should have the same right to choose when it comes to overdraft programs covering checks.”

Of those consumers who signed up to have debit card or ATM transactions covered for a fee, the poll revealed that 55 percent had experienced an overdraft in the past six months.

This finding is not surprising given the aggressive and oftentimes misleading “opt-in” marketing tactics many banks target at customers who overdraw their accounts.  These marketing materials often drive customers to high-cost coverage while failing to market cheaper alternatives.

Thirty-nine percent of those who had overdrafted their account in the past six months chose not to sign up for such coverage. 

Seventy percent of consumers responding to the Consumer Reports poll said they would like to have the choice when it comes to whether their bank covers the checks they write for a fee when they do not have enough money in their accounts to cover them.  About half of these respondents – or 47 percent – indicated that they would select this option.  Over one-third – or 38 percent – said they would decline to do so.  

Consumers Union noted that there are cheaper alternatives for consumers when it comes to covering overdrafts triggered by debit cards or checks.  Most banks allow customers to link checking accounts to a savings account, credit card, or a line of credit. When an overdraft occurs, the bank will automatically transfer money to cover the transaction from the linked account. The FDIC has concluded that the fees assessed for these other types of programs are significantly lower than for automatic overdraft loan programs.

The fact that customers who opted in are more likely than not to have recently overdrawn their debit card accounts confirms that many customers remain exposed to excessive overdraft fees and unfair practices, and underscores the need for meaningful substantive reforms.

The FDIC is currently considering a proposed guidance on overdraft programs for small state chartered banks that recommends that consumers be given the right to “opt-out” of overdraft coverage for paper checks and electronic payments.  Consumers Union and other consumer groups have urged the FDIC to go further and require banks to get their customers’ permission before charging fees for such coverage. The groups also recommended that consumers who want overdraft protection should be offered the least expensive form of overdraft coverage for which they qualify.

A federal judge in California recently ruled that Wells Fargo gouged consumers by manipulating the order it processed transactions, which triggered more overdrafts and generated more costly fees.  The FDIC’s proposed guidance would put an end to this practice for the state-chartered banks it supervises.  Consumer groups recently urged the Office of the Comptroller of the Currency  to take similar action with respect to the banks it supervises and to require banks to offer consumers the lowest cost overdraft option available to them.

The Consumer Reports National Research Center conducted a telephone survey of a nationally representative probability sample of telephone households.  1.014 interviews were complete among adults aged 18 or over.  Interviewing took place over September 30-October 3, 2010.

Michael McCauley, Consumers Union, 415.431.6747 ext. 126 or

See press release archive

RSS News Feed

Get all the latest information from the CR Press Room delivered right to your desktop.