More than 40 million Americans paid bank overdraft fees in the past year, according to Pew Charitable Trusts.

Despite fees that can cost up to $38 per incurred overdraft, many consumers have accepted overdrafting as a way to borrow small amounts of money.

According to Pew, more than 12 million people see a bank overdraft fee as a positive aspect of their financial health because their payments are honored even when their checking account balances are too low.

Pew says the overdraft protection fees are not only too high, but also that there are too many instances that find a consumer paying multiple fees.

Many banks have a policy that dictates if a consumer does not repay the overdrawn balance and the original overdraft fee within a certain period of days, an additional fee will apply. The additional fees range from $6 to $20 and can be charged an unending number of times until the balance is repaid.

Even smaller banks have adopted the pricing structures and procedures that larger financial institutions set in place.

Bank Overdraft Fees Benefit the Banks

From a banker’s point of view, the customer would prefer to have a debit charge go through and pay an overdraft fee rather than have a transaction declined. The banks feel they are doing consumers a favor by allowing them to make purchases they otherwise could not afford at the moment.

Banks and credit unions have seen their revenues increase substantially since the advent of the bank overdraft fee. According to Moebs Services, financial institutions earned more than $32 billion in bank overdraft fees in 2016 alone.

Pew Charitable Trusts has issued statements indicating that such fees prey on the most financially vulnerable customers.

Three out of four of repeat overdrafters say they periodically have trouble meeting monthly expenses. Consumers who incur an overdraft more than three times a year are the nation’s most vulnerable financial audience. Pew said that such heavy overdrafters are more than twice as likely to admit they overdraft their account during an ATM withdrawal.

Even though banks and financial regulators never meant for bank overdrafts to be used as a form of credit, millions of consumers do just that.

Pew Charitable Trusts has expressed that the data suggests a need for financial institutions to start offering affordable small installment loans as a more fair and sensible way to assist consumers. Such loans would offer the multiple overdrafter an alternative to paying accumulating, excessive fees and could prevent the consumer from pursuing expensive payday loans.

Pew has also called for the bank overdraft system to be overhauled. Pew would like to see overdraft charges limited to six in a 12-month time period and fees to be limited to one per overdraft occurrence.

If you have been a victim of excessive or multiple bank overdraft fees from your financial institution, you could benefit from speaking with a lawyer regarding your legal options.