Bank of America Overdraft Protection
During the bank bailouts, consolidations, and other turmoil of the last year, an emerging trend at many retail banks was a sharp rise in the charges and frequency of overdraft fees. This lead to a lot of public uproar, bad press, and worse for the banks. Bank of America overdraft protection was one of those most-often cited as being “malicious” towards customers.
Overdraft protection is a means of allaying accidental bounces that lead to huge fees from multiple sources per bounce. For instance, a bounced check may incur a charge from the retailer, their banking institution, and even your own bank. This can mean one overdraft of $10 could lead to nearly $100 in fees. Overdraft options save that by having your bank cover the overdraft and charge you one fee, one time. In theory, and usually in practice, this is a great bit of protection for the customer should they occasionally forget to balance their checkbook.
Some were complaining that an overdraft at Bank of America could cost them much more, lead to double-charges, or even appear to have been done purposefully by delaying deposits so that overdrafts would occur. While the charges may or may not have been true, the publicity stank and the BoA overdraft scandal commenced. The Better Business Bureau says that they received more than 1,200 complaints nationally from January 1, 2009 to August 31, 2009.
To allay these complaints and the rising public outcry towards them, the banks most often accused (Bank of America and JP Morgan-Chase) announced on September 23, 2009 that they had instituted new overdraft policies. So the new Bank of America overdraft protection policy has been set.
This new BoA overdraft policy puts a cap on the total amount allowed to be charged for overdrafts per customer (account) per year. In addition, overdrafts of $10 or less will incur no fees. Finally, no more than four charges per day per account may be incurred.
One agreement that consumer advocates wanted from overdraft at Bank of America was the guarantee that transactions will happen in the order they are received by the bank, rather than the apparent “deposits last” that many believe is the current policy. Bank of America declined this, their representative stating that deposits are never guaranteed unless they are cash to a teller, so most deposits are held for 24 hours or one business day for protection against fraud or other problems.
Regardless, the new Bank of America overdraft protection changes are definitely a step in the right direction for all BoA customers.
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