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Most bank customers sign up for new checking accounts without having a full and complete understanding of many of the account terms and conditions (Ts & Cs). One of the most misunderstood terms and conditions is that of overdraft protection programs.

Generally, the function of an overdraft protection program is to allow the bank to cover (pay) an outstanding debit charge, credit charge, or check that is made against a checking account that has an insufficient balance to cover the charge. In return, the bank will charge the customer a fee for this service. The fee is applied directly to the account balance at the time of the charge, adding to the already negative balance.

One of the most misunderstood aspects of consumer overdraft protection programs is the fact that the bank will allow a debit card charge to be approved and processed, even if the account balance is negative! Most checking account customers mistakenly believe that the bank will simply reject any debit purchases they attempt if the balance is too low to cover it. Not so! Instead, the bank will honor it and then charge an overdraft fee. This simple misunderstanding results in billions of dollars of additional revenue for banks in the form of overdraft fees.

Not only are banks in no rush to dispel this misconception about how overdraft protection works, but many of them are actively engaged in practices designed to increase the likelihood of multiple overdrafts occurring on the same day, thereby increasing the number of charges. for overdrafts they earn. They do this by first processing the largest transactions made on a given day and then processing the smallest transactions. Doing it this way increases the likelihood of an overdraft occurring. The result: As the latest transactions are processed, each one can result in an overdraft fee.

If you’ve noticed one or more overdrafts on your bank statement recently, you probably want to do everything in your power to eliminate it. This sentiment can be especially strong if you believe that the overdraft is the result of a deceptive practice on the part of the bank.

To get your bank to accept an overdraft override request, try the following steps:

1. Get a copy of your bank statement, either online or on paper.

2. Find the line item in question by looking at the date of the transaction that resulted in one or more overdraft fees being charged to your account. These will be expressed as a debit against your account (shown with a minus sign, such as a withdrawal).

3. Look at the checking account balance that appears in your account on the day and time of the charge that resulted in an overdraft. Was he still positive at the time? If so, you can convince your bank that your statement is unclear and that a reasonable person would have concluded that there was a balance in the account at the time.

4. Remember that when calling your bank, it is important to be polite and friendly. They receive thousands of complaints every day about overdraft fees and are ready with verbal ammunition to answer you. Their most common ploy: make it seem obvious that you made the mistake, not them. But anyone who has seen a typical bank statement knows that they are far from clear.

5. If you cannot convince the telephone representative to reverse the overdraft fee, consider writing a letter to your bank’s head office to formally file a complaint.

Of course, all this protest work takes time, and for many of us, time is money. Sometimes it can be easier to stop trying to fight your bank over a certain fee, rather than choosing to switch to a bank that doesn’t charge overdraft fees. There are banks on the market today that will never charge you an overdraft fee, even if you overdraw your account!

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