Across America, consumers are finding themselves being hit with unreasonable overdraft fees due to overdrawn bank accounts.

Many consumers complain that they were hit with these fees unexpectedly, stating that they did not sign up for overdraft protection.

According to the American Bankers Association, approximately 61 percent of consumers do not pay monthly maintenance fees for their checking accounts but that same number of consumers still may get hit with overdraft fees.

In a more specific analysis from Teresa Dixon Murray, “The Plain Dealer” on www.cleveland.com, she presented a breakdown of the fees financial institutions charges for 10 of their most common services, with special attention given to Third Federal Savings & Loan.

The report analyzed the fees associated with the checking accounts offered by the banks, and analyzed which banks offered the fewest strings or was the most popular.

The survey found that most of Cleveland’s local banks had not increased their fees in the past five years, and that some of the fees in the survey can be avoided if customers do not lose their ATM cards or face an overdrawn bank account.

Overview of Overdraft Fee Trends

Anaylsts believe that the fees associated with accounts have stabilized because consumers are much more informed, and are most likely aware when one bank charges more than basic fees.

In addition, banks and other financial institutions have cut back on overdraft fees due to the number of complaints from regulators. According to the survey, only one of the banks actually increased their overdraft fees, Third Federal Savings & Loan.

The result is surprising to many, as the Cleveland-based bank is well known for offering low mortgage rates and having close relationships with its customers. The survey found that Third Federal Savings & Loan had increased five of its fees: overdraft, cashier’s checks, stop payments, replacing lost debit cards, and returned deposit.

Despite this, Third Federal Savings & Loan has one of the smallest overdraft fees of $33 compared to many local non sufficient fund fees. Even though a number of customers despise these fees, especially when associated with overdrawn bank accounts, banks and other financial institutions depend on fees as a main source revenue.

According to the survey, banks had collected $18 billion from overdraft fees nationwide in 2009. However, this changed drastically in 2010 when one third of the revenue dried up due to a law change requiring banks to obtain prior consent before charging such fees.

As of Aug. 15, 2010, banks and other financial institutions became outlawed from charging overdraft fees to their customers unless they opted for overdraft protection. Third Federal Savings & Loan was no exception, and must disclose their overdraft policies to their customers.

Analysts state that undisclosed overdraft fees became a problem due to a suffering economy, and a number of customers began being more careful not to overdraw their accounts. However, this allegedly spurred a number of financial institutions to unfairly charge and index transactions to maximize overdraft fees against their customers.

Customers of banks or credit unions may be eligible to file legal action against their respective financial institutions if charged improper overdraft fees. Potential claimants should consult a specialized lawyer to determine if they have a lawsuit.

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