After widely publicized cases regarding disgruntled consumers, banks and overdraft fees, Congress passed new legislation designed to prevent abuse by financial services providers. The only problem is many consumers are not aware of the new laws. Or, if they are, consumers don’t understand the details. Findings by HarrisInteractive suggest that more banks should be engaging in marketing campaigns to educate customers.
From now on, if consumers want their bank to cover their overdrafts on their accounts, they must sign an agreement every year. This agreement, called opt-in, must be in place if consumers want to spend more than they have in their accounts. So far, only 27% of consumers know a lot about this new law and another 37% know a little about the law. In the past 12 months, 19% of consumers relied on their banks to cover their overdrafts.
Here is the range of consumer feelings about whether they'll sign opt-in agreements:
- Extremely likely 5%
- Very likely 9%
- Somewhat likely 15%
- Not very likely 17%
- Not at all likely 34%
- Need more information 20%
Overall, 39% of consumers said they would like to decide on a case by case basis about whether they want overdraft coverage. Harris researchers point out that banks have a number of ways to connect positively with consumers both on the overdraft topic and on the general service level. Small local banks, in particular, have a chance to improve their relationships with their clients and take back market share that was lost to larger operators during the past decade.
[Source: Most Americans Unaware of Impending Regulatory Changes Regarding Overdrafts. HarrisInteractive. 20 May 2010. Web. 15 Jun. 2010]