Wells Fargo still peddling overdraft protection
Most ATM machines are just ATM machines.
But Wells Fargo's ATM machine is apparently a time machine, too.
Someone recently sent us a screen capture from a Wells Fargo ATM that seemed to be operating in a time before financial reform convinced most banks to rein in or abort altogether that most outrageous of retail banking scams: overdraft protection.
The screen read: "Debit Card Overdraft Service is an option if you prefer to have your ATM and everyday (one-time) debit card purchases (such as gas stations, grocery stores, restaurants, etc.) approved when you don't have enough money to cover the purchase."
It went on to say that, by signing up for overdraft protection, Wells Fargo, at its discretion, will green-light your purchase and benevolently discount its $35 overdraft fee, provided you bring your account back into the black promptly.
There was no mention on this screen pitch of the fees involved for this oh-so-generous service.
If you hit the green "Continue" button, however, you'll eventually learn that you'll be dinged $12.50 if you run over by $50 or less for the day and $20 if your daily overrun is more than $50. No mention that you could just let the card be declined for free, of course.
And you thought you couldn't travel back in time!
"Free" overdraft protection was unmasked as one of banking's most lucrative scams during the financial re-deal of 2010. Consumer Federation of America figures showed that fee-based overdraft programs cost customers $23.7 billion each year, while the banks extend $21.3 billion in short-term credit to cover the overdrafts at negligible cost to them.
The average debit card overdraft: less than $17. The average overdraft fee: $34. The interest you pay for that short-term loan would make a loan shark blush.
The Fed didn't shut the practice down entirely, but it required banks to obtain your opt-in before picking your pocket in this manner. Public scorn was sufficient to shame Bank of America and others into dropping overdraft fees altogether.
But Wells Fargo still has the audacity to shove that pitch in your face when you're trying to use its ATMs.
That's one time machine you don't want to ride.
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