Despite recent federal regulation changes aimed at preventing banks, credit unions, and other financial institutions from charging steep overdraft fees, consumers are still getting hit with the charges.

The average overdraft charge is $35 each time consumers overdraw their debit accounts.

According to a recent report from the Pew Charitable Trusts, banks are improving their disclosures of overdraft protection programs, account terms, and fees to consumers. the same people are still facing overdraft fees.

The report showed that 84% of banks still charge overdraft fees for transactions made using an the ATM or debit card. The Pew report also analyzed disclosure documents from 45 out of the 50 biggest banks in the United States, which hold approximately 66% of all domestic deposits.

Federal regulators had taken steps to make banks provide adequate disclosure information to consumers regarding their overdraft programs and required banks to give consumers the option to sign up for their overdraft protection programs.

However, the Pew study found that over half of the banks’ consumers who overdrew their checking accounts in the past year did not remember agreeing to the overdraft protection programs. Consumers are hit with overdraft fees when they overspend their checking accounts, and banks cover the transactions.

Overview of Overdraft Protection Problems

Based on the Pew report, customers of both banks and credit unions are facing overdraft fees without fully understanding the overdraft programs of their respective financial institutions. Even customers who do not sign up for overdraft protection can still be charged a fee, even though they receive none of the benefits of the overdraft protection.

The consumers who do not opt in to overdraft protection will have their debit card transactions and ATM withdrawals declined  when they exceed the amount available in the checking account at the time. Researchers who conducted the Pew report stated that consumers would rather have their card declined than pay an overdraft fee.

According to a report from the Consumer Financial Protection Bureau, customers paid over $34 billion in service charges in 2012, with 61% of the charges from overdraft fees.

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