Alliant overdraft protection is advertised as less expensive than that at most banks, but Alliant Credit Union fees can add up.

According to the credit union’s website, Alliant overdraft protection is available through two programs:

• The Overdraft Protection option transfers funds from a linked Alliant Savings or Alliant Supplemental Savings Account to avoid overdrafts from check or debit card transactions.
• The Courtesy Pay option allows Alliant to cover checks, electronic payments, debit card purchases and transfers that won’t clear because of Non-Sufficient Funds. Alliant charges a $28 fee per covered item, and both that fee and the overdraft balance must be paid within 17 days.

For those who do not opt in to Alliant overdraft protection, there is a $25 Non-Sufficient Fund fee of $25 per item.

Alliant Overdraft Protection Fees Benefit Credit Union

Most banks and credit unions offer at least one form of overdraft protection program. These programs are marketed as beneficial to consumers, but the financial institutions often get the greater benefit when consumers opt in to overdraft protection programs.

Consumers have filed several successful class action lawsuits against financial institutions for overcharging overdraft fees. Unscrupulous banks and credit unions use a variety of different tactics to maximize the fees they collect.

Some financial institutions withhold the posting of deposits in order to subtract withdrawals first. Consumers have reported even making a cash deposit that does not post until checks or debit card transactions have posted, which means they incur overdraft fees.

While debit card purchases that could lead to an overdrawn account could be simply declined, the bank that allows overdraft transactions to be paid can charge multiple overdraft fees.

When financial institutions post debits and withdrawals in non-chronological order, they can manipulate the amount of money in overdraft fees they charge.

According to a report by Pew Charitable Trust, 84 percent of banks charge overdraft fees by allowing customers to overdraw their accounts due to insufficient funds. Pew also determined the median overdraft penalty fee is $35.

Banks and credit unions are prohibited from automatically enrolling customers in overdraft protection programs. A law went into effect Aug. 15, 2010, that requires customers to proactively opt in to an overdraft protection program if they choose to do so. Still, fewer than half the people who have overdrawn their checking accounts in the past 12 months remember opting in to an overdraft protection program, according to Pew Charitable Trust.

Pew also said that 68 percent of consumers would rather experience the decline of a debit or ATM transaction than have to pay the average $35 fee to allow the transaction to go through.

Consumers who have questions regarding their financial institution’s overdraft protection programs shouldn’t hesitate to call or speak in person with a representative and obtain the full disclosures in writing.

In addition to the Alliant overdraft protection programs, those of other financial institutions are under investigation, including:

• Astoria Bank
• BECU (Boeing Employees Credit Union)
• Educational Employees Credit Union (EECU – California)
• Nationwide
• Pacific Western
• Patelco
• State Employees Federal Credit Union (SEFCU – New York)
• Sterling Bank

You may have a legal claim if your were charged excessive overdraft fees by one of these banks or credit unions:

• Alliant Credit Union
• Astoria Bank
• BECU (Boeing Employees Credit Union)
• Nationwide
• Pacific Western
• Patelco Credit Union
• State Employees Federal Credit Union (SEFCU – New York)
• Sterling Bank
• Educational Employees Credit Union (California)

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