LOS ANGELES, CA (Catholic Online) - According to Pew, Americans paid $29.5 billion in overdraft fees last year. "They make it pretty complicated," Susan Weinstock, director of Pew's Safe Checking in the Electronic Age Project says. "Consumers tell us they don't read these things because they're impossible to read."

However -- Spokesperson for the American Bankers Association Nessa Feddis questions the findings and conclusions. "They seem to be saying that they don't have much confidence in American consumers or their choices," Feddis said.

Among the most salient conclusion made in the report -

-- The majority of financial institutions don't summarize important policies and fee information in a concise and easy-to-understand format that allows customers to compare account terms and conditions.

-- The average length of a checking account disclosure is 69 pages, 31 pages at the credit union. Is shorter necessarily better?

"Although shorter, credit union disclosures often do not include information that would allow a customer to compare account fees, terms, and conditions," the report says.

Most significantly, there are no consistent names for the same exact fee. Pew researchers found credit unions had eight different names for "overdraft penalty fee," while banks used five different names for "extended overdraft penalty fee." This several different names make it difficult to comparison shop for a checking account.

-- Financial institutions do not provide account holders with clear and comprehensive information about overdraft options and their costs.

Banks and credit unions typically let customers choose from three overdraft options: You can decide not to opt in; You can agree to an "overdraft penalty plan" that lets you overdraw and pay a sizeable fee (median fee is $35 for banks, $25 for credit unions); or you can set-up an "overdraft transfer plan" that will move money into your checking account from a savings account - at a much lower cost - to prevent an overdraft.

Pew notes that banks and credit unions are not required to provide complete information about the various services available and as a result, may not learn about lower-cost options.
 
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