Chase Bank Overdraft Protection

The Chase Bank overdraft protection program is undergoing a huge change. Overdraft protection has been both a curse and a boon for many Chase debit card users.  While it is nice to not get turned down for a transaction because of insufficient funds in one account when you have money in another account at the same bank, these overdraft protections have come with a high fee.  Now, Chase Bank is changing its Chase overdraft protection to be more consumer friendly.

Chase has announced two major changes to overdraft protection.  The biggest change is the overdrafts in the amount of $5 or less will no longer be charged a fee.  This is a great change.  There is nothing more frustrating than overdraft on one purchase and then have a whole bunch of tiny purchases rack up overdraft fees.

The second change to that Chase Bank is making is that Chase debit card holders will not be automatically be opted in to the Chase overdraft protection.  Instead, debit card holders will have to proactively sign up for overdraft protection.  This will help to make sure that people will only be allowed to withdrawal more money from their Chase checking account if they want to.  Otherwise, their purchase will be declined.

These changes to the Chase Bank overdraft policies are very interesting.  There is a lot of scrutiny right now about banking practices.  I think that Chase Online Banking is trying to get ahead of the coming regulatory curve.  What do you think of these Chase Bank overdraft protection changes?

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By nittany · 1 Comment
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One Comment on Chase Bank Overdraft Protection

  1. Frank Opinion on Mon, 24th May 2010 4:25 pm

    2. Chase bank has started a very sleazy campaign of confusing and scaring its debit card holders into signing up for overdraft protection.

    Like all banks, Chase makes big money from overdraft fees. Now that the Fed has made a law that banks cannot charge overdraft fees to debit card holders without them first granting permission to the bank to do so, Chase feels it is in danger of loosing its overdraft fee revenues.

    The law is intended to protect the consumers from predatory practices of banks, such as exorbitant overdraft fees.

    But instead of acting in accordance with the intention of the law, Chase has decided to use the loophole in the law to continue squeezing money out of unwary consumers. The loophole is that banks can charge overdraft fees if debit card holders have first granted permission to the bank to charge overdraft fees.

    So Chase is using confusion and scare-tactics to scare its debit card holders into signing up for overdraft protection (and the associated fees). What is utterly disgusting is that Chase has launched a massive campaign to make its debit card holders signup for overdraft protection.

    In your neighborhood Chase branch you will see large billboards – “They your debit card functions is changing…” Soon we will no longer be able to pay for your purchases if you do not have sufficient funds in your account – unless you allow us to do so… You will see similar advertisements launched by Chase via other channels.

    Also if you go to the a Chase branch to do any over-the-counter transaction, you will be sent to meet a banker after the transaction who will personally try to make you signup for overdraft protection by using confusion and scare tactics.

    Sleazy!

    Dear Chase Bank – do you think customers don’t recognize such sleazy tactics? Looks like you do. You are wrong. You are alienating your customers by such sleazy tactics. This attempt at protecting your overdraft fee revenues will actually backfire and you will see lost revenues due to drop in customer perception and loyalty. Please take notice.

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