So Banks Really Want to Help Customers? Here’s What They Should Do

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Last week, Bank of America and Chase announced some supposedly customer-friendly changes to the way they assessed debit card overdraft fees. The changes did not impress anyone.

As the LA Times reports, two more banks (Wells Fargo and U.S. Bank) followed suit with similar half measures to help customers who haven’t quite figured out that it’s a really bad idea to use their debit cards when they don’t have enough money in their accounts to cover to tab. Citibank, it should be noted, has no plans to change its overdrafts at all.

As I wrote last week:

The moral is: Read your bank statement closely now, read it closely after the changes are in effect, and keep reading it closely down the line. These companies are very good at taking money from unsuspecting customers, so you must always stay vigilantly on guard. These are not companies to trust.

LA Times columnist David Lazarus nails it by stating that, despite the banks’ proclamations of doing what they can do help customers during trying times, there are many, many simple things they are not doing. Why? By not doing them, the banks make more money. From Lazarus:

My feeling is that if banks truly want to treat people with respect, they should use all the technological means at their disposal to prevent customers from overdrawing their accounts.

Just as most ATMs will tell you if you have insufficient funds in your account for a transaction, why can’t a similar alert be immediately provided at the cash register when you use your debit card, or when you make a payment online?

Or how about this: Automatically send customers a text message or e-mail any time they overdraw an account and give them 24 hours to balance their funds before any fees kick in.

Much has been said about the banks’ sneaky practice of automatically including overdraft protection—and its correlating fees—without asking customers if they want it first. Why can’t banks instead ask customers if they want the services Lazarus describes? These are actual services that people might want, not merely bank money makers given the misleading name “protection.”

As it stands, customers should not expect their banks to help them avoid overdrawing. Banks make money when customers overdraw. It is not in the banks’ interest to prevent customers from overdrawing. But what banks should understand is that they lose money when customers take their business someplace else.