by Mike on February 8, 2010
Would you pay $36 for a cup of coffee?
Of course not, but that is what runs the risk of happening if your account becomes overdrawn. Banks and credit unions are charging between $20 and $35 for the “convenience” of allowing you to overdraft.
high fees mean that someone who overdraws their account at the ATM by $20, and is charged the median overdraft fee of $27, would incur an annual percentage rate of 3520 percent if they repaid the loan in two weeks. Even payday lenders don’t charge that much. – bankrate.com
The obvious course of action is to avoid overdraft fees altogether, but sometimes even the most cautious person can make a mistake.
The good news is, you may be able to get the fee (or fees) waived if you can stand some humble pie. The simple steps below assume the overdraft is your fault and not the fault of the bank or another institution withdrawing more money than authorized.
Identify the cause of infraction. Was it an automatic payment you forgot to record? Outstanding check? Didn’t account for ATM fees? Authorization hold? Plain old carelessness? Whatever the cause, know this before you pick up the phone. Being able to articulate the source of the problem increases your chance of success. Alternately, if you claim not to know why your account was overdrawn, this implies carelessness and irresponsibility. A customer service representative may not be motivated to help someone who isn’t motivated to help themselves.
Call the bank and ask them to refund the fee. Be polite & concise.
Example: Good afternoon, I just noticed an overdraft fee on my account. I didn’t realize there was an authorization hold on my account. I’d really appreciate it if you can waive the overdraft fee.
There are 4 parts to this statement:
1. Polite greeting
2. State the reason you are calling
3. Explain why it happened (BE BRIEF!) Use your research from step 1
4. State the requested action
At this point the customer service representative will look over your account. A little known fact is CSRs typically authorized to waive a certain amount of fees within a given time period. Some banks will waive 3 fees within a 12 month period…no questions asked.
The stronger your account, the better chance you have of getting the overdraft fee refunded. I spoke with a bank associate from a major financial institution. I was told that when considering refund requests, they take the following into consideration: amount of non-sufficient funds (NSFs), payment history, history of balance, amount of deposits and other relationships within the bank (i.e. credit card, loans etc). Know where your account stands. There is truth to the phrase “knowledge is power”. If your account is in good standing you will probably have your fee refunded. If that is the case, thank the CSR and learn from your mistake. You’re done!
Sometimes, the CSR may tell you there is nothing they can do. At this point, reinforce your request:
Ex: I would really appreciate a good faith waiver. I’ve been a happy customer for quite some time. Would you mind reviewing my account to see if there is anything further you can do?
By asking the CSR to review your account, you have opened the door for them to change their minds. CSRs are people too, and spend a majority of their day being verbally abused by irate customers. Your patience and kindness can go a long way. A tactful reply and a good standing account may prompt a response in your favor. Hopefully by now you’re waiver request has been granted.
You may get a representative that doesn’t feel like helping you. It is easier for them to tell you “no” than process and notate a waiver. If you are still declined, thank the CSR for their time and say goodbye. If you know your account has a strong history call back later, you’ll be connected with a different CSR and repeat step 1. Another representative may be more willing to help you.
If you still don’t get a refund, you can do 1 of 2 things:
1. Cut your losses and learn from your mistake
2. If your bank is local, stop by and speak to a bank representative or branch manager in person
Whatever the outcome, the most important thing is to learn from your mistake and take actions to prevent overdrafts in the future. Also remember, an overdraft refund is not an entitlement. If they still refuse to issue a refund after your best efforts then move on!