Overdraft fees may be slowly bankrupting the elderly

Chicago, ILConsumers may want to keep a closer eye on their finances, as the rampant assessment of excessive bank overdraft fees have come under fire in the public and private sectors.

A study recently released by the consumer watchdog organization the Woodstock Institute, claims that banking customers and people with outstanding loans are often unknowingly being enrolled in programs with excessive bank overdraft fees - with charges sometimes as high as 2,500 percent.

The study claims that 75 percent of banking institutions that offer automated overdraft services sign customers up for these programs automatically, despite three out of four elderly clients claiming they would prefer their transaction be cancelled than garner additional fees.

Among the largest groups victimized by this practice are the elderly and retirees, with the Chicago Tribune claiming that people over 55 years of age are paying $4.5 billion in overdraft fees each year. A total of $513 million of these fees are drawn from Social Security beneficiaries.

Customers have begun filing lawsuits against these institutions, stating that banks have misrepresented their services by continually restructuring transactions and reporting erroneous balance information to drive clients into overdraft.