Overdraft Charges

Overdraft Charges/Fees and Their Impact

Overdraft fees aren’t life-threatening. However many consumers would be shocked at how checks can be re-ordered and processed at some banks and credit unions, disproportionately affecting minorities, younger people, and lower-income consumers. The fees can rack up.

“It is a harmful practice that can make one overdraft turn into five, six, seven overdraft fees,” said Thaddeus King, an officer with the Pew Charitable Trusts’ consumer finance project.

Financially strapped consumers who overdraw checking accounts using their debit cards and checks can pay more than $400 a year in overdraft fees relating to ATM cards and debit cards, according to a report by the Consumer Financial Protection Bureau.

Consumers must voluntarily sign up for overdraft coverage for point-of-sale purchases with a debit card or transactions using the ATM. But signing up — without understanding how fees can be triggered — often can drive up costs, consumer advocates say.

More than a dozen credit unions across the country — including two of Michigan’s largest credit unions, Advia Credit Union in Kalamazoo and United Federal Credit Union in St. Joseph — have been hit with lawsuits challenging whether their members have been misled about what can trigger overdraft fees.

Practices being challenged include:

  • Taking transactions out of the order they’re made. Some financial institutions have a policy of processing the highest payment, such as a mortgage, first before smaller debit card transactions. That can lead to more overdraft fees if you’re signed up for overdraft coverage and you use a debit card frequently, for example, for coffee, lunch, or other small purchases.
  • Failing to properly disclose how “opt-in” practices can work. Simply put, things work a little differently with debit cards and many consumers still don’t know that. Consumers, for example, cannot be charged fees for overdrafts on ATMs and most debit card transactions unless the consumer has agreed in advance to “opt-in” for such coverage.
  • Failing to explain how balances are calculated. Do customers or credit union members understand the terms for when an overdraft fee on a debit card could be triggered? Did the credit union disclose how balances are calculated and when transactions are viewed to be cleared?

“You’re unaware and you’re being deceived into what circumstances can put you into overdraft status,” said Philip J. Goodman, a Birmingham attorney and of counsel with the  Serling & Abramson, P.C. Law Firm.

Consumer Financial Protection Bureau Report

Consumer advocates maintain that overdraft fees have turned into a “highly lucrative profit center” for some financial institutions.

Under federal regulations that went into effect in 2010, banks cannot charge overdraft fees for debit purchases and ATM withdrawals without a consumer’s earlier consent or without an “Opt-In.”

But quite often, when opening a checking account, a representative at the bank or credit union will put a piece of paper in front of a consumer to “Opt-In” for coverage relating to a debit card. Many consumers agree to such coverage because it seems sensible. Consumers often don’t want to be embarrassed by being turned down for purchase if their account is running a tad short.

The digging into the numbers is likely to continue, along with the criticism of high fees and unexpected outrageous charges on some consumers who can least afford it.

To view the full story in the Detroit Free Press Visit: Credit Union Overdraft fees

Overdraft Charges FAQs

What are overdraft fees?

What practices are being challenged regarding overdraft fees?

Can consumers be charged overdraft fees without opting in?

News Articles
Personal Injury Attorney

Personal Injury Attorneys Focused on Helping Individuals in Michigan

A Michigan Personal Injury Attorney When Michael B. Serling won the first jury trial in Michigan for a client who had developed asbestosis, a non-cancerous scarring of the lungs associated with asbestos exposure, it was a landmark case. This was the […]

Read the Rest
Toxic Water at Camp Lejeune

New Study Finds More Cancers Linked to Toxic Water at Camp Lejeune

New Study Links Toxic Water at Camp Lejeune to Additional Cancers A recent government study revealed that individuals, both military and civilian, who resided, worked, and served at Camp Lejeune in North Carolina during the mid-1970s and 1980s face a […]

Read the Rest
The Link Between Talcum Powder & Ovarian Cancer

The Link Between Talcum Powder & Ovarian Cancer

When The Past Can Still Harm You: The Link Between Talcum Powder & Ovarian Cancer When news outlets first reported the connection between talcum powder and various cancers, many people shrugged and thought, “I haven’t used talcum powder in years.” […]

Read the Rest
What Happened at Camp Lejeune? Camp Lejeune Toxic Water

What Happened at Camp Lejeune?

Between 1953 and 1987, the water supply at Camp Lejeune, a military base in North Carolina, was contaminated with dangerous chemicals linked to cancer, birth defects, and other serious health problems. The widespread use of industrial solvents, such as trichloroethylene […]

Read the Rest
Wrongful Death Attorney in Michigan

Wrongful Death Attorney in Michigan

Wrongful Death Lawyer in Michigan Losing a loved one is painful enough without having to fight for justice. If negligence or intentional wrongdoing resulted in an untimely death, the victim’s family deserves compensation. This is where an experienced wrongful death […]

Read the Rest

Vietnam War Veteran’s Day

The Vietnam War, also known as, the Second Indochina War or the Vietnam Conflict, was a conflict in Vietnam, Laos, and Cambodia that lasted from November 1955 to April 1975.

Read the Rest

Looking to the Stars: Lessons from Asbestos in Space Exploration

The history of space exploration is a tale of human innovation and technological leaps. Yet, amid the triumphs and achievements, lies a less discussed aspect: the use of asbestos in spacecraft construction. Asbestos, celebrated for its insulation and heat-resistant properties, […]

Read the Rest
Asbestos in Pop Culture: Unveiling its Cultural Depictions and Impact

Asbestos in Pop Culture: Unveiling its Cultural Depictions and Impact

​​​​​​​Lights, camera…asbestos? While not the dreamiest, camera-ready topic, asbestos has found an unexpected place in pop culture. Beyond its industrial applications, asbestos and its associated health risks have woven themselves into various forms of media, from movies and TV shows […]

Read the Rest
Detroit Skyline

Cruise, Connect, and Celebrate – Serling & Abramson, P.C.’s Summer Outing

The Serling & Abramson, P.C. team enjoyed a fun summer outing earlier this week! After a delicious meal in Downtown Detroit, the crew headed aboard the Diamond Princess for a sunset cruise of the Detroit River.

Read the Rest

Pioneering Justice

Leaders in Michigan asbestos litigation since 1975.

Areas Of Practice & Expertise

150+ Years Combined Experience

About Us

The Serling & Abramson law firm was founded in 1970 by Michael B. Serling. Mr. Serling was the first attorney in Michigan to file a wrongful death action on behalf of the family of a mesothelioma victim. In 1975, a young widow of an asbestos insulator contacted Mr. Serling concerning her husband who had died at age 52. She was left with two young children and was trying to raise them on a $4 per hour job. The extremely gratifying feeling of success in prosecuting the case and securing a sizable settlement for the widow and her children inspired Mr. Serling to continue this work.

Michael soon realized that it was more than just asbestos insulators who were falling victim to asbestos-related diseases. It soon became apparent that mesothelioma and lung cancer were occurring in virtually every building trade and many industrial settings. He dedicated his career to securing justice for all victims affected by asbestos exposure. Today, over 50 years later, Serling and Abramson are still representing victims of asbestos-related diseases, such as mesothelioma, lung cancer, and asbestosis.

Read More