Opt-in is wrong opt-ion.
By Citi March 18, 2010 06:04 PMCiti believes that the proposed overdraft regulations, including "opt-in," don't go far enough in protecting consumers. Before a customer can be charged for an overdraft at an ATM or when using their debit card, they should be given the choice -- at the point of sale -- to approve the transaction or not. And until that happens, the customer does not have true choices. The days of the surprise "$39.00 cup of coffee" are not over until customers have all of the information they need -- at the point of sale.
At Citi, we've never authorized an overdraft at the ATM or debit point of sale where the customer did not have sufficient funds at the time. On the eve of changing federal regulations, other banks are now telling customers they will also decline these transactions. This is a good thing, even if somewhat late in coming.
Other competitors are now aggressively urging customers to "opt-in" to debit overdraft coverage -- in other words, asking their permission to cover charges that exceed their balances, and then charging them overdraft fees to do so. The New York Times highlighted the practice in the latest "Your Money" column.
Remember, there are almost always better options than simply opting in to overdraft fees, including e-mail alerts when account balances are low, mobile access to balances and linked accounts with much lower transfer fees.
To learn more about your options before opting in to overdraft fees, see our previous blog post on the topic.
Also, check out the Senate testimony of Citi's John Carey on the pitfalls of overdraft fees and how customers should be given greater choice and control at the point of sale.