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The Consumer Financial Protection Bureau is about to see whether banks have complied with rules on how they manage consumers’ overdraft protection services, Bloomberg News reports.The rules were supposed to keep banks from luring customers into signing up for overdraft protection – a service that lets people go over their bank balance while slapping them with an overdraft fee at the same time.
Overdraft fees make up a huge chunk of their revenue each year, topping $30 billion in 2011, according to Moebs $ervices. Banks have also caught fire for misordering debit card transactions in such a way that consumers unknowingly overdraw their accounts.
Consumers shell out an average $35 per overdraft fee at major banks, about $10 more than credit unions and local banks charge.
“Planning enforcement against banks that ‘exploit consumers with deceptive marketing’, the agency will examine marketing material and customer service scripts to determine whether banks are confusing customers into purchasing protection,” Bloomberg reports.
JPMorgan Chase, Wells Fargo and Bank of America are among those being probed. Depending on how the investigation pans out, the agency might tighten restrictions even more next year.
But even if overdraft fees are lowered, banks will likely just jack up fees in other areas. Already they’ve started charging replacement fees for lost cards and set higher minimum balance requirements, prompting millions of consumers to flee the banking system altogether.