Numerous consumers across the country are complaining of massive overdraft fees after certain debit card transactions, which required their banks or credit unions to transfer money from one of their alternative accounts.

While this is common in overdraft fee practices, financial institutions must now have consumer sign up for their overdraft protection programs before actually implementing the service.

Alliant Credit Union is one of such organizations, which only asks members to join their overdraft protection program after explaining the benefits to that decision.

Founded in 1935, Alliant Credit Union now has nearly 300,000 members nation wide and manages over $8.9 billion in assets. Alliant Credit Union is a non profit financial cooperative, which means members are not just customers but they are also owners.

Alliant Credit Union offers a number of services to attract new members including: safety and security, high rate dividends, and readily available professional services. As the eighth largest credit union in the United States, Alliant Credit Union offers overdraft protection to its members to insure their “peace of mind” as their company site states.

Like most overdraft fee practices, money is transferred from the customers’ Alliant savings or supplemental savings account to avoid overdrafts in their debit card transactions. The overdraft protection program at Alliant Credit Union charges “$3 a day” if a customer needs to use the credit union’s coverage.

The courtesy fee from the credit union is $25, with customers having 17 days to pay the overdraft balance. Alliant overdraft fees apply to checks, electronic payments, and transfers that were not processed due to insufficient funds.

Overview of Overdraft Fee Practices

Overdraft fees, also called insufficient funds or courtesy fees, are the fees imposed by banks or credit unions when money is needed to pay insufficient checking account funds due to debit card transactions.

The financial institution typically transfers money from either a savings or other alternative account to cover the purchase. Even though overdraft protection can be convenient for consumers who need money for small quick purchases like groceries, they can quickly compound into intense financial pressure.

Furthermore, the recent trend of rising overdraft fees has left many customers worried and exasperated, as many had complained they had either not signed up for overdraft protection or that it was not adequately explained.

In addition the overdraft fees becoming higher, customers also alleged that their transactions were processed out of order to maximize overdraft fees.

When the number of complaints regarding overdraft fees kept increasing in numbers, the Consumer Financial Protection Bureau had examined the overdraft fee practices of banks and credit unions.

On Aug. 15, 2010, financial institutions became prohibited from charging overdraft fees to customers, unless they sign up for overdraft protection. Even though stricter overdraft protection policies are now in effect, consumers are still reeling from improper overdraft fees.

Consumers who were improperly charged these overdraft fees may be able to file legal action against either their bank or credit union. Potential claimants should contact a specialized lawyer to determine their eligibility for an overdraft fee lawsuit.

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