{"id":4311,"date":"2017-08-18T11:00:11","date_gmt":"2017-08-18T05:30:11","guid":{"rendered":"http:\/\/gtm360.com\/blog\/?p=4311"},"modified":"2022-01-17T13:34:45","modified_gmt":"2022-01-17T08:04:45","slug":"overdraft-protection-another-hot-opportunity-for-bpos","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2017\/08\/18\/overdraft-protection-another-hot-opportunity-for-bpos\/","title":{"rendered":"Overdraft Protection – Another Hot Opportunity For BPOs?"},"content":{"rendered":"

Consumer advocates ranted about overdraft protection fees in 2008, saying the service was forced down upon consumers.<\/p>\n

\"\"<\/a>While the uninitiated can Google “overdraft protection” for a prosaic definition of the term, Stanley Bing<\/strong><\/a>\u00a0offers the following tongue-in-cheek description for one of the most lucrative services offered by US banks:<\/p>\n

\u201cNo matter what you spend with your debit card, even if you have no money in your account, the guys at the bank will make sure that you\u2019re not embarrassed. They\u2019ll pay your tab!\u201d<\/p><\/blockquote>\n

In return for having your back, banks charge an overdraft protection fee. Ranging from $20 to $30, this fee is a major source of revenues for American banks.<\/p>\n

To appease consumers, the US government passed Reg. E in 2009. The new rule required banks to seek customers\u2019 explicit opt-in for overdraft protection.<\/p>\n

Banks went after their customers aggressively to do this. I\u2019d called out marketing campaigns for enrolling consumers for overdraft protection (ODP) as a big opportunity for Indian BPO industry at the time. More on this in my post entitled Overdraft Opt-In Presents A Huge Opportunity For BPOs<\/strong><\/a>.<\/p>\n

\"\"<\/a>Seven years later, US Banking industry\u2019s overdraft protection business has bounced back to 2009 levels. According to Wall Street Journal<\/em><\/a>, “overdraft fees totaled $33.3 billion in 2016”.<\/p>\n

Consumer advocates are now back with a fresh raft of complaints.<\/p>\n

In a new lawsuit filed recently, the consumer protection regulator CFPB has charged TCF National Bank with “tricking consumers” into overdraft services by using misleading language that enrolled “people who said yes to a question over the phone about wanting their debit card to continue to work as it had been.\u201d<\/p>\n

The CFPB further claimed the bank asked new customers about opting in \u201cimmediately after a series of mandatory items the consumer had to agree to in order [to] open the account\u2026most consumers fell into the rhythm of initialing the terms of the agreement and signed on.\u201d<\/p>\n

A survey by overdraft regulation proponent Pew Charitable Trusts<\/em> found that 52% of consumers who have paid a debit-card overdraft fee don\u2019t recall opting in to this service.<\/p>\n

Meanwhile, there\u2019s the usual outrage on Twitter:<\/p>\n

\n

Would it be great news for everyone if their payments were dishonored & they'd paid late fees to TELCOs et al?
https:\/\/t.co\/JkjgNRDC3C<\/a><\/p>\n

— Ketharaman Swaminathan (@s_ketharaman) March 17, 2017<\/a><\/p><\/blockquote>\n