Overdraft protection through a credit union or bank is essentially a short term loan, and is a lucrative business for banks, costing consumers billions per year.

Overdraft protection programs purport to protect the consumer, but in reality are often forced on consumers without a clear explanation as to what exactly the program entails.

This lack of transparency can prevent consumers from making a truly informed decision about overdraft protection and can ultimately cost consumers money.

What Exactly Is Overdraft Protection?

Overdraft fees often add unnecessary financial burden to bank customers. While overdraft protection is purportedly for the good of the customer, financial institutions reportedly rake in a huge amount of money every year from overdraft fees. Banks and credit unions have recently begun to expand on this profit, steadily increasing overdraft protection fee charges.

Many consumers also report that their banks are deliberately processing transactions out of order so that they can maximize the overdraft fees they can charge for an overdrawn bank account.

An overdraft fee is incurred on an overdrawn bank account, charged to move money to a checking account in order to cover a transaction. While the transfer may be from a linked account, it might also be a loan from the bank or credit union.

As of August 2010, banks and credit unions are prohibited from charging overdraft fees unless the customer has opted-in to their overdraft protection program. Consumer advocates report that those who opt in to overdraft protection services tend to be charged more in fees than those who do not.

Overdraft Protection Fees Lawsuits

The largest U.S. banks rake in millions from overdraft protection fees alone, and in many cases, this money comes from the Americans who can least afford it.

The consumers who struggle to maintain a minimum balance in their accounts tend to be penalized with excessive fees and make up a good portion of the money generating profit for big banks and credit unions.

A growing number of overdraft fees lawsuits are confronting the way financial institutions, such as Old National Bancorp, run overdraft programs. Overdraft fees lawsuits allege that the overdraft programs of some banks and credit unions involve excessive overdraft limits, and are often not transparent, available, and comprehensible for their customers.

There are an increasing number of consumers who are choosing to file individual overdraft fees lawsuits or join class action overdraft protection lawsuits against Old National Bancorp or other financial institutions.

These overdraft fee lawsuits allege corrupt policies and violations which have unfairly charged customers overdraft fees.

If you or someone you know has been subjected to excess or heavy overdraft fees or account closures and believe your credit union or bank may be at fault, you may be able to join a class action overdraft fees lawsuit.

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