Banks, and most likely other financial institutions like credit unions, have been increasing their ATM fees and overdraft protection fees in order to profit off their consumers, according to a recent survey.

The survey, which was conducted by Bankrate.com, reports that customers who use out-of-network ATMs are paying an average fee of $4.52, indicating that over the last five years, the average ATM fee has risen by 21 percent.

Similarly, the average overdraft charge for bank users has risen to a new high of $33.07, and credit union overdraft fees are likely just as high as their banking competitors.

The Bankrate.com survey drew data from ten banks and thrifts in 25 large United States markets; the study looked at one interest and one non-interest account in over 200 different financial institutions that offer their consumers checking accounts.

In total, Bankrate examined 237 interest and 233 non-interest consumer accounts between July 9 and Aug. 5 of this year.

The survey also reports that free checking accounts are becoming rare finds, as most checking accounts now come with both high out-of-network ATM Fees and overdraft fees.

What is an Overdraft Fee?

An overdraft fee is a service charge credit unions and banks impose on consumers when the financial institution has to move money from a savings account to a checking account to cover the amount of a transaction. An overdraft fee is sometimes also referred to as an insufficient funds fee, courtesy fee, or a similar term for these overdraft charges.

According to the Bankrate.com survey, the average bank’s overdraft fee has hit a new high of $33.07, rising about 9 percent since 2010, and the city with highest overdraft fee average is Milwaukee with $34.79 and the lowest is San Francisco with $30.35.

Because credit unions are trying to compete with their banking counterparts it may have pushed some of these non-profit banking organizations to push their overdraft fees to similar highs, forcing some consumers to question the assumption that credit unions are friendly, member-run co-ops that offer lower fees than traditional banks.

Some credit unions you may be familiar with, and that may be employing unfair overdraft fees for their own personal gain, include:

• Patelco Credit Union, Pleasanton, CA
• United Nations Federal Credit Union, Long Island City, NY
• Wings Financial Credit Union, Apple Valley, MN
• Ent Federal Credit Union, Colorado Springs, CO
• Hudson Valley Federal Credit Union, Poughkeepsie, NY

It is important to note that as of Aug. 15, 2010, credit unions and banks are not allowed to charge consumers overdraft fees unless a customer has specifically opted-in to the financial institution’s overdraft protection program.

If you believe your credit union has unfairly charged you an overdraft fee, has processed transactions out of order with the intent of triggering an overdraft, or has signed you up for its overdraft protection program, you may have a legal claim and be eligible to file an overdraft fee lawsuit or join an overdraft fee class action lawsuit.

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