Bank of America announced this week its intentions to help customers avoid overdraft fees on debit card purchases. Starting this summer, the Charlotte, N.C.-based bank will only authorize single debit card transactions at the point of sale if a customer has enough money in their account at the time.
The announcement arrives on the heels of the Federal Reserve’s recent decision to enforce guidelines that will prevent banks from automatically enrolling customers in overdraft protection programs, a guideline effective this July. And while the decision could potentially collapse revenue by the millions, it’s clear that customer service is the focal point for one of the world’s largest financial institutions.
“Our customers have been clear that they want to know if a purchase is going to overdraw their account,” Deposits and Card Product Executive Susan Faulkner said in a press release. “Our solution is simple, clear and helps customers control their finances by reducing the possibility of over-extending themselves at the point of sale with a debit card.”
The change will be a welcomed one for frequent Bank of America debit card holders. Because the bank was unable to alert customers of when their account balance was running low or if it was overdrawn, incurring multiple overdraft fees was a common problem for most offenders.
“We understand that the environment has changed, and we are changing with it,” said Faulkner. “We will continue to make changes to our products, services and solutions that deliver more value to our customers by providing the clarity, control and choice they need to better manage their everyday finances.”
When the change is implemented, customers with insufficient funds who attempt to withdraw from a Bank of America ATM will be prompted that a $35 overdraft fee will be charged if they choose to continue their transaction and they will be asked to confirm or decline the decision. Until then Bank of America customers will still be charged overdraft fees for bounced checks and payments that are automatically withdrawn from their accounts without sufficient funds. But with the cancellation of multiple overdraft fees, customers are just thankful that the bank is attempting to help them out.
“I think it’s an excellent move,” Bank of America customer Lillian Prince said. “They should’ve had this when I was in college buying $42 Happy Meals.”
In 2009, banks generated close to $20 billion from overdraft fees on debit purchases and ATM transactions and another $12 billion by covering checks and recurring bills, according to Moebs Services, an economic research firm.