Fee Fight: How to Pass on Overdraft Protection

Just about every bank customer has a horror story of how his or her bank charged them $30 or more in overdraft fees. What’s less common are stories on how bank consumers can actually opt out of — or reverse — overdraft charges.

But it’s a story that needs telling.

The story starts with a shift in bank policies toward overdraft fees, as BankingMyWay pointed out earlier this week. While Congress mulls what action to take against bank overdraft fees, big banks like Bank of America (Stock Quote: BAC), JPMorgan Chase (Stock Quote: JPM) and Wells Fargo (Stock Quote: WFC) all rolled out plans to limit overdraft fees.

But what if your bank has no such plan, or if it does, do you really want a policy that wil let you fully opt out of bank overdraft plans?

The fact is, you can opt out of overdraft "services."

Obviously, job one in that regard is to be especially careful with your checking account. Savvy consumers can sign up for an online account and check their balances every day – or at least before going shopping or using their debit cards to pay bills. Studies show that’s exactly what most bank consumers do. An American Bankers Association survey shows that 82% of bank customers have not been hit with a bank overdraft fee in the past year. And, of the 18% who’ve been penalized with such a fee, 64% had more than one overdraft fee over that year-long time period. That suggests bank overdraft fees are focused on a relatively small group of bank customers.

These “repeat offenders” don’t seem to mind. According to the ABA, 96% of bank customers slapped with an overdraft fee say they were pleased their overdraft was covered.