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Consumers Want Banks to Decline Debit Card Overdrafts

The Center for Responsible Lending has published results from a survey titled 'Consumers Want Informed Choice on Overdraft Fees and Banking Options' icon_PDF_small.gif conducted by Opinion Research Corporation that found 'respondents overwhelmingly prefer that debit card purchases be declined at the checkout if these would otherwise result in an overdraft fee.'

The survey also concluded that:

  • More consumers are enrolled in the most expensive overdraft option, and low-to moderate-income consumers pay the bulk of the charges.
  • Nearly nine of ten respondents want the option to choose whether their checking account will include a fee-based overdraft loan feature.

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What I found interesting from the survey is that when the consumers were asked about what they'd prefer when their $5 purchase is about to trigger a $34 overdraft fee, 20%(!) of the people said they would rather pay the fee and continue with their purchase (Table 5 on page 4). When the purchase amount goes up to $40, even among people who have been stung with an overdraft fee recently, 25% of them would choose to pay the fee again.

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