Overdraft, Depositor Fees Likely Unlawful: US Consumer Agency

The U.S. Consumer Financial Protection Bureau on Wednesday issued guidance that surprise overdraft fees and unexpected depositor fees for bounced checks are likely unfair and unlawful practices.

The agency said that both fees likely violate the Consumer Financial Protection Act’s prohibition on unfair fees that are unavoidable to consumers.

Overdraft fees can catch consumers off guard when they don’t reasonably expect their actions to incur a fee, while charging a fee to a depositor of a bounced check penalizes someone who might not be aware of a bad check, the CFPB said.

“Americans are willing to pay for legitimate services at a competitive price, but are frustrated when they are hit with junk fees for unexpected or unwanted services that have no value to them,” said CFPB Director Rohit Chopra in a statement.

“We are providing guidance on existing law that will help law-abiding businesses seeking to fairly compete and the families they serve.”