The new consumer friendly reforms that the government has pushed down the throats of the banks have taken effect. And do the banks ever hate it! No more are they going to be able to sign you on for overdraft protection without your permission and charge you a $35 overdraft fee each time you spend more than what you have in your bank with your debit card or a check. Those fees kick in for going over as little as two dollars. They actually make billions of dollars this way each year on the backs of the paycheck-to-paycheck crowd. Some of these families actually pay in excess of $1000 each year just for going overboard a few times each year by as little as two dollars at a time. If the banking customer can’t really manage a simple checking account (or a savings bank account with a debit card on occasion) and make sure they don’t go over, surely it isn’t the bank’s fault, I know is that?

Judge Alsup in a landmark Calfornia case has called it an unfair trade practice earlier this year in an August ruling against Wells Fargo. What the bank did is pretty much standard practice all over the country. Let’s say that you have $100 left in your account, and you spend $10 three times on minor purchases through the day. You’re confident now that you have $70 left; you need to buy a $90 coffee machine. You realize that you would need to overdraw by $20; you feel that it might be worth it, because you really need to buy a gift for a wedding. When you get your statement the following month, you see that you’ve been charged a $35 overdraft fee not the one time you expected, but two times. This is because the bank reorders your purchases so that the $90 coffee machine comes first, and the three $10 items come later. This is what the judge says he finds reprehensible. Wells Fargo and that particular lawsuit were forced to refund more than $200 million collected out of these kinds of devious trickery.

The banks are going all out to find a way to trick you into signing up for their fraudulent practices again. What the consultants are telling them is this – only one in five checking account holders (or rarely,savings bank account holders) in the country are routinely careless with their account balances. These are the most profitable accounts for the banks to deal with. So the banks just need to ignore everyone else and somehow get these people to voluntarily sign up to get robbed again. The banks are stationing salespeople next ATMs to get people to sign up. They are calling them, offering them cash bonuses – everything they can possibly do to get them to drop their guard.

So the next time you’re accosted at an ATM or you get a phone call from the bank asking you why you would put yourself in a situation where you could get embarrassed at the restaurant not having enough money on your debit card, tell them that you are happy to be embarrassed. It’s far better than getting robbed blind three times a day.If you do want real overdraft protection, ask them to link your checking account to your savings bank account. That’ll teach them.

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