Unaffordable help

Sometime in the past 30 years or so, a financial think tank devised a subtle yet brilliant way to raise profits easily and without much notice.

Overdraft protection coupled with minimal fees was a perfect marriage of what seemed to be an altruistic gesture to help customers. These fees are nothing more than thinly veiled high percentage loans. Since the dawning of money for merchandise and services, some form of hidden charge(s) has always been possible.

Today, any and all financial business has the potential for added hidden charges or loans. These are tantamount to free profits, calculating approximately over $30 billion annually. Many checking accounts automatically come with overdraft protections, whether asked for or not.

The parts of our society that use this protection are those who can least afford these excessive charges. For most people it becomes a revolving door of charges and paybacks, resulting in even deeper financial problems. These service charges can range from $10 to $38 regardless of the amount withdrawn.

In 2007, Jean Ann Fox, the director of financial services at the Consumer Federation of America, said, “But aren’t we in trouble if the only way banks stay afloat is by sticking their most desperate customers with the highest priced credit that consumers have not applied for and don’t know they’re using?”

The staggering amount is expropriated from the middle class and lower income segments of society. The people who can least afford it!

This story was originally published February 12, 2017 at 4:00 AM with the headline "Unaffordable help."