A week after trashing plans to enact a $5 monthly debit card fee, Bank of America (NYES:BAC) has scrapped an idea that would have charged overdraft fees on debit card purchases, according to several reports.
Continue Reading Below
Currently, if customers try to make purchases on their debit cards without enough money in the bank, the transaction will be declined with no charge applied to the account.
The bank had been considering a program that would text customers notifying them of their predicament and ask if they’d like to go through with the transaction anyway with a $35 overdraft penalty.
The decision to scarp this idea follows intense customer backlash directed toward its plans to charge users a $5 monthly fee to make debit-card purchases starting in January--the bank reversed course on those plans last week.
The overdraft system used by the nation’s biggest bank proved to be a huge revenue driver before the company got rid of it, but it was a source of much resentment from its customers.
In 2010, debit purchases accounted for about 60% of overdrafts at Bank of America, according to an earlier New York Times report, which amounted to millions of dollars in fees.
BofA had planned to test the text message overdraft concept in trials starting early in 2012.