Automatic enrollment in overdraft programs means that many older persons are being charged high fees for products that do not want or need. In fact, 75 percent of older persons would prefer to have a transaction declined than incur overdraft fees. Persons aged 55 and over pay $4.5 billion in overdraft fees each year. Over $513 million of these overdraft fees are levied on recipients of Social Security benefits.
Community and consumer groups, including Woodstock Institute, have pushed for mandatory consumer protections since 2004, hoping to eliminate some of the worst abuses. With most banks relying heavily on these fees as a steady stream of income, reform can’t just be voluntary at three big retail banks.