Banks' 'courtesy' overdraft at soaring rates irk consumers

USA Today:

It's called "courtesy overdraft" and has long been used by banks to automatically pay transactions that account holders don't have the money to cover — and then charge them a steep fee. For years, banks have made it easier for customers to overdraw their checking accounts, aided by a cottage industry of consultants who make big money by helping to wring fees out of consumers, a USA TODAY analysis finds.

But what began as a customer service has often become an important revenue driver for banks at the expense of the most vulnerable consumers, according to bank memos reviewed by USA TODAY and interviews with industry insiders.

"This practice has gone awry and needs to be fixed," says Alex Sheshunoff, a key consultant who once advised banks to pay, not return, overdrawn transactions.

"This is something everyone should be trying to find a solution to, not fighting."

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