Chase Bank’s Overdraft Opt-in System: FAIL
By Consumers Union on Thursday, April 8th, 2010
Consumerist shared this story of a consumer trying to navigate Chase’s new opt-in form:
So my wife got an email today talking about the changes coming to our Chase account (well, WAMU, but we unfortunately inherited Chase). The email is REALLY confusing and tells that you can opt out of debit overdraft coverage, but adds other stuff that’s confusing and makes it SEEM like you’ll be charged an overdraft fee whether or not you opt out of overdraft coverage. It really confused my wife. Not happening until August automatically. Not good enough for me. I logged in to opt-out today.
Here’s where it gets better. Instead of a simple “opt out” yes/no, Chase has added TWO questions, with opposite answers necessary. The text below the first “Yes/No” seems to be explaining the first Yes/No, when in fact, it’s talking about the second. The first Yes/No is COMPLETELY unnecessary, and I think just put there to bamboozle people into selecting “Yes” on the overdraft coverage below.
You can check out the form and vote on what you think here.
Chase has also launched a marketing campaign designed to get you to sign up for a $35 fee.
A new federal law says if you try to overdraw your account with a debit card, the bank will soon need your permission to penalize you. Getting you to say yes is now a cottage industry.
Michelle Carrol got the sales pitch from chase.
“I did sign up,” Carrol said, “The letter appeared to be an urgency situation to me. The word protection was used.”
So Carroll called to allow Chase Bank to hit her up for $35, three times a day, should her debit card overdraw her account.
From Atlanta’s WSBTV
We recently sent a letter (click here for the PDF) to OCC’s John Dugan in regards to Chase’s unfair and deceptive opt-in marketing. Their marketing letter says:
“YOUR DEBIT CARD MAY NOT WORK THE SAME WAY ANYMORE EVEN IF YOU JUST MADE A DEPOSIT unless we hear from you.”
“To keep your debit card working as it currently does, please call…” and “Remember your debit card transactions will be denied in the future if you do not have sufficient funds in your account” (emphasis in original).
Chase is trying create the impression that if a consumer doesn’t agree to an expensive product then their debit card will simply stop working or experience significant problems in everyday usage which is not true. From our letter:
The statement in Chase‟s solicitation that debit card transactions will be denied if the customer lacks funds completely disregards less-expensive overdraft protection options offered by Chase in the form of a linked credit card, savings account, or home equity line of credit. Solicitations should not allow banks to give the erroneous impression that no other alternatives exist to avoid debit card denials…
The Federal Reserve Regulation E rule on overdraft opt-in requires banks to provide consumers who do not opt in with the same account terms, conditions and features as provided to consumers who do opt in.
We urge the OCC to examine Chase Bank‟s overdraft solicitations and to correct misleading and deceptive terms, require disclosure of all options to cover overdrafts, prohibit sustained overdraft fees, and make sure account features are the same for consumers who refuse to opt in to the bank‟s most expensive form of overdraft coverage.
Have you received this letter from Chase? Tell us about it in the comments and then let the OCC know too.