If you feel you have been a victim of exorbitant bank fees, you may benefit from speaking with an overdraft fee attorney.

HSBC and Capital One are among the financial institutions currently under investigation for potentially actionable fee practices. Studies show banks and credit unions have significantly increased their revenues from overdraft fees in recent years.

Overdraft fees became popular because of increased competition due to both deregulation and technological advances. Banks suddenly found that charging customers money by adding fees to everything led to some healthy profit margins for the banks.

To make sure they maximize the number of overdraft fees they can charge, some banks reportedly process transactions in an order that leads the customer’s account to be drained more quickly. HSBC and Capital One are among the financial institutions currently under investigation for these and other overdraft fee practices.

The Consumer Financial Protection Bureau is examining overdraft fee structures among all financial institutions and could issue new regulations to reign in some of the high fees.

An Overdraft Fee Attorney Can Help

An overdraft fee attorney deals with financial investigations and subsequent prosecutions.  Many banks already have been hit with class action lawsuits because of their deceitful overdraft fee shenanigans over the years. It would be logical to believe that once a bank has settled even one such lawsuit that the unscrupulous tactics would cease, but that has not necessarily been the case.

Pew Charitable Trusts indicate banks more than doubled their revenue from fees between 1984 and 2015. Banks appear to be using overdraft fees as a way to diversify their sources of revenue.

“Income from fees for services has grown considerably over time,” according to Pew’s website. “In 1984, fee revenue was small compared with income earned from interest. By 2015, this gap had narrowed substantially.”

According to Pew, America’s banks reported more than $11 billion in overdraft fee and non-sufficient funds revenue, which was nearly two-thirds of all consumer deposit account fee revenue.

Just 18 percent of account holders pay 91 percent of the overdraft and service fees, and a majority of these customers earn less than $50,000 per year. A quarter of the customers pay a week’s worth of income in overdraft fees annually.

CFPB’s research was analyzed by Pew, who found that “debit card transactions are the preferred tool of the most financially vulnerable bank customers. Because overdraft fees are flat and fixed – they are the same whether an account is overdrawn by $10 or $100 – debit card overdrafts bear the most disproportionate penalty because they tend to be the smallest transactions.”

An overdraft fee attorney knows the standard overdraft fee at most banks is around $35, and nearly 80 percent of financial institutions allow ATM and debit transactions to spur more overdraft fees rather than declining a transaction.

The Consumer Financial Protection Bureau reports that debit cards have the lowest median value of transactions that often lead to overdraft fees. That figure is $24, and if a $34 overdraft fee is  added on top of that, is equal to a loan with a 17,000 percent annual percentage rate.

If you believe you have been a victim of excessive overdraft fees, an overdraft fee attorney can provide you with the next steps to take to obtain restitution.

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