Remove overdraft authorization from your bank account on clarkhoward.com

Many banks have software systems designed to throw you into overdraft so they can score big on fees. Here's how it works: Let's say you have a debit card. You use it and your transaction is approved even if you don't actually have the money in your account. That's when you'll get hit with an overdraft fee -- even though the transaction goes through!

PIRG now reports that half of all overdraft fees come from debit cards in this way. But there is a solution. You can tell your bank to remove the overdraw authorization on your account. Clark recommends you go in person and fill out the necessary paperwork.

Yes, you'll have the embarrassment of having your card rejected at the coffee shop if you don't have money in your account. But it is better that you should have to dig through your pockets for cash than pay a hefty fee later and get the transaction approved up-front.

What others are saying

RBC Overdraft Protection
I was told that I had a $300 courtesy overdraft limit on my checking account. After spending 2 hours at the RBC branch, I was told that it was removed. A few weeks later, I was hit with over $100 in overdraft fees ... they never removed it. Went to another branch to do the same and they told me it shouldn't go through if I use it as as a debit but if I use it as a Visa that they have no control. I went through the process again and also showed them on my account that it was a debit. Well, they did it again! There were 3 debit approvals that went through when the account was overdrawn ...$43.00 in gas cost an extra $123!! I do not have this problem with any other bank I deal with in terms of a debit purchase. Stay away from RBC ..,. they keep saying it's been removed, but it hasn't! I am taking it to the top this time. And they do the same, clear larger debits before smaller ones to collect more fees.
By Lorraine @ 11/28/08 09:33:01 PMreport abuse
Removing Overdraft Protection
Write a letter telling them that you want ovedraft protection removed from your account. If they say you cannot remove it, get a new bank and take your letter declining overdraft protection with you when you open the account, making it clear to your new bank from the start.

Beware tho. Rather than decline a transaction that exceeded my available balance, my bank used a pending deposit to pay an item. When asked why they permitted authorizations in excess of my available balance, they said "Your debit card was allowed to go through because the check was still in clearing. If your account didn't have that check in clearing, the purchases wouldn't have been allowed through. We work under the assumption that the check will clear, so if you choose to use your funds before they are available, we will allow them but you will be charged a fee. " I turned off overdraft protection, and I don't rememeber the part where I said they could use my own money to violate me.

I have asked them repeatedly to send me a copy of the terms of service that explains in plain English exactly what happens, but they simply don't have a document to explain it. This Bank is MB Financial.
By Aimee @ 11/21/08 09:17:59 AMreport abuse
Wells FArgo
For whatever its worth : For every Checking account i have i create a SAvings Account.. Wells Fargo lets me hook One Checking up to One savings account for overdraft protection. I also have my wellsfargo Credit card protecting one of my checking accounts. There IS a $10 when you "overdraft" and funds get pulled.. but its a tad better than the $30-40 or so.
By Bob @ 10/26/08 10:29:06 PMreport abuse
Bank of America posting process rigged
Is there a bank out there that has not rigged the posting process to accumulate debits before it applies your deposits in order to generate fees? This should not be legal.
By Little John @ 10/15/08 02:12:25 PMreport abuse
Wachovia is disgraceful
I was just charged $210 in overdraft fees and for the life of me I can't see how it was justified. I have spent 45+ mins HOLDING on the phone with them trying to get a person on the phone that can explain to me how this has happened. I had a posted balance of $57 and then $54 dollars in pending transactions. How does that overdraw? Is there nothing we can do about this problem??? How can banks get away with doing this?
By Dice-K @ 10/15/08 11:41:09 AMreport abuse
overdraft charges
My brother came from India,and open an account with wachovia, Me,my housband had with wachovia since 20yrs, never new about this charges till recently, my brother use debit card thinking ,only transiction will go through if there is money?, he must have use may be 50 dollars worth, but overdraft charges! over 300 dlr, and he makes 6dlr per hr. And asking and calling wachovia, no one is explaining any other alternative, because they do not want to loose your overdraft income! is this criminal act on bank side? can we file action law suit?
By jyotika Ladd @ 10/05/08 09:35:00 PMreport abuse
thank you
I needed to know this! Sometimes I run close, and am eaten up by debit-card overdraft fees...
By loretta @ 09/27/08 04:08:43 PMreport abuse
Bad advice, will cause Bounced Checks.
If you remove overdraft protetion from your checking account then your checks will bounce if you over draw your account. Bouncing a check is a criminal offense. Better to pay the overdraft fee.
By enoch drebber @ 09/18/08 12:20:36 PMreport abuse
Overdraw Authorization
Bank of America refused to withdraw the overdraft feature from my account. Compass Bank refused to do it for my son. Is there a law these banks are breaking by refusing our requests?
By dina @ 09/18/08 02:54:40 AMreport abuse
overdraft removal
Clark my son is 19 and has a checking account at Wells Fargo and we went in today to remove the banks overdraft limit where it charges him $36 dollars a pop if he goes over. The manager stated there is no such letter and that there is NO way to remove it...? Help
Confused from California
By margeate @ 09/17/08 09:26:43 PMreport abuse
Courtesy Pay Overdraft Protection
I don't believe that any financial institution can require that you have overdraft protection. I work for a Credit Union. We have a form for members wishing to opt out from this type of protection. Also I worked at Bank of America recently and don't believe the associate that you are dealing with if providing accurate information. I would stop by a banking center and ask to speak with a manager.
By Michael @ 09/17/08 03:45:50 PMreport abuse
Overdraft
Why does Wachovia say there is no option for this or paper work to fill out. WHY WHY
By Orlando @ 09/17/08 03:24:43 PMreport abuse
Overdraft protection
I have repeatedly asked my bank, Bank of America, to have courtesy overdraft removed. I would love to have my card rejected if I have made a budget error. The bank says that I am unable to opt out of overdraft protection. Does anyone know for certain that I can do this with Bank of America?
By Courtney @ 09/17/08 02:35:11 PMreport abuse
overdraft protection
I bank with Wachovia and I simply have a separate line of credit that is activated should I overdraft and the money comes from that account. If I pay it off within 30 days, I don't pay interest on the advance and I avoid a huge $35 overdraft fee!
By Katherine Lloyd @ 09/17/08 02:31:19 PMreport abuse
This Week's Poll comment
None of those are even of concern Clark. The real point is that we have political leaders in Congress using Social Security funds to pay other things and also pork barrel projects that our fantastic leaders don't need except to have themselves re-elected. So the REAL issue is where are the leaders of our government taking money from--which program--to subsidize their own greedy needs.
By billr @ 09/17/08 01:30:22 PMreport abuse
Overdraft fees
Another way I find that the account is overdrafted is by using my debit card at a gas station, or other, which does not require putting in the securinty code to get the product. I have learned that if the security code is not requested by the machine, one will get tacked onto the cost of the product a security fee, (hefty in some cases) which has over drafted my account. It takes a couple of days for the security fee to be released back into my account. I have noticed this more and more as the economy has took a dive and for the first time in years, I am seeing overdrafts on my account. I have learned that one must go into the gas station and tell them exactly how much you want on the card and this will protect from the holding fee. Also, I use my debit card less as I have lost trust in how companies are meeting there bottom line and also I do not like for others to be using my money for more than one minute to profit in some way. Maybe the fee comes from loss as a result of idenity theft (cards) in my case..
By Linda Madden @ 09/17/08 11:37:11 AMreport abuse
Overdraft protection
US Bank will happily scam you on this overdraft thing. They are crooks!
By Mindy @ 09/16/08 08:35:35 PMreport abuse
email
Please send me Clark's email
By Jeanette C @ 09/16/08 03:52:08 PMreport abuse

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Sep 16, 2008 -- Remove overdraft authorization from your bank account

What others are saying