“Most consumers avoid overdraft fees.”
That’s according to the American Bankers Association, or ABA, which recently released a survey of 1,000 people on the subject of overdraft fees.
The survey found that 77 percent of those questioned said they hadn’t paid an overdraft fee in the last 12 months. And indeed, it’s probably reasonable to characterize 77 percent as “most.” (The survey was conducted by Ipsos-Reid in mid-August and has a margin of error of plus or minus 3 pecent.)
Moreover, of the 21 percent who said they’d paid an overdraft fee, 29 percent said they’d paid only one fee and 21 percent said they’d paid two fees. Whether that 50 percent also qualifies as “most,” to use the ABA’s word, may be open to debate, but it’s probably not necessary to split semantic hairs over the question.
What’s more worrisome is the finding that of the 21 percent who said they’d paid an overdraft fee, 18 percent said they’d paid six-to-10 fees and 7 percent said they’d paid more than 10 fees in the last 12 months.
Do the math, and that’s 25 percent, or more than 5 percent of the survey population, who paid at least six overdraft fees in the last 12 months. At an average of $27 per overdraft, that’s an expenditure of perhaps $162 or in some cases more than $270 on overdraft charges by just 5 percent of the surveyed group. Other studies have found even higher concentrations of multiple overdraft fees being assessed on small percentages of consumers.
For those people: Ouch.
Also worrisome is a finding that of the 21 percent who said they’d paid an overdraft fee, 29 percent also said they would have preferred that the bank had returned or declined the payment. Twenty-nine percent is clearly not “most.” But still, that’s a sizable proportion of people who received -- and paid for -- a service they didn’t want.
Props to the ABA for the nifty blue, red and yellow piecharts, by the way.
And finally, if you paid an overdraft fee in the last 12 months, were you glad your payment was covered or would you have preferred that the bank had returned or declined the payment?