TD Ratchets Up Overdraft Opt-In Push With Pop-Up Scare Tactics

TD Bank is really stepping up its efforts to try to get customers to sign back up for “overdraft protection,” which really just protects their right to charge you $35 if you want to buy a $2.00 candy bar and only have a $1 in your account. Now they’re greeting customers accessing their accounts online with pop-up ads trying to scare them into agreeing to signing up for the service.

Reader Jay spotted this one last night and was bothered by the fact that they don’t mention on the landing screen that TD Bank will charge you for this dubious favor, but they do make sure to stoke your anxieties a little bit: “Simply say “Yes” To TD Debit Card Advance. And relax. We’ll continue to cover your debit card and ATM transactions, just as we do today – even when you may not have enough funds available in your account.”

Jay said that when you click the “Are there Fees?” FAQ, “It initially says “It’s the same as you already pay for overdraft!,” like it’s no big deal, and then they finally mention the $35 fee. I really feel horrible for the less informed bank customers who think TD (and other major banks) are doing them a favor by pulling these stunts…”

As of July 1st, banks can’t automatically enroll you in “overdraft protection” plans, they have to ask for your permission. Looks like they’re not content to just stuff your mailbox with junk mail telling you what a great deal overdrafts are.

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  1. shepd says:

    Wow, this sucks. TD Bank Canada doesn’t charge you such excessive fees for overdraft (although their APR on it is worse than you get on your average credit card).

    • guspaz says:

      I also find it funny that the tagline for a Canadian bank is “America’s Most Convenient Bank”

      I also don’t get why they’re such a mess in the US when they don’t have any of these problems in their home country.

  2. YouDidWhatNow? says:

    …what did you expect? Did you honestly think banks would present the opt-in things as “Hey, we still want to bend you over a barrel and eff you in the bum with no lube any time you try to charge something that’s more than a penny more than what you have available, rather than just decline the charge. That’s cool with you, right?”

    • Conformist138 says:

      You’ve convinced me, my new response to these things will be, “OK, I expect you to lie and cheat, I accept I can do nothing about it, I will gladly remain silent while you violate my every orifice, and I will not warn others because, hey, it’s what you do.”

  3. Dallas_shopper says:

    Overdraft protection is for suckers.

  4. goodpete says:

    Back in the day, my credit union used to offer overdraft protection where the first 3 “hits” to it were free (and they’d send you an alert). Then after that they would charge you. Honestly, I don’t see why more banks don’t do it like that. I might even consider signing up for such a service.

    • goodpete says:

      That is, first three hits each month.

      I only ever “made use” of it a half dozen times. But I never got charged. And it was relatively convenient each time.

      But I should note that the same bank has since gone over to the dark side. So much for friendly, neighborhood costumer service.

    • ramfan1701 says:

      Because they don’t make nearly as much money that way. Even worse, is when they restructure charges from biggest to smallest so that you get multiple overdraft fees when you only should have really incurred one, based on when you made the charges. (One of the many reasons I no longer work for or bank with Wells Fargo).

      Of course, their excuse is “well, we don’t want you rent check/car payment, whatever to bounce” but that’s bull. They make a ton of money on fees. I know that they put all that info in their sign up docs for the account, but there’s so much legal crap there it’s hard to take in all at once. And even now, afaik, there’s no way around this issue if you do opt in for overdraft.

  5. TuxthePenguin says:

    And here is the nasty side of regulations – they didn’t force banks to use a certain language for getting people to opt in… so these banks can get people to skirt that law as closely as possible. Say it costs $100,000 to get that through all the layers of review (legal, etc) but if it earns them more than that…

    Hence why CPA’s are so worthwhile (Full disclosure – I’m a CPA). For someone who just a few million in investments/life savings, paying me a few thousand will save them far more than that on taxes. Switching investment types, estate planning, etc…

    All that said, is there anything stopping a bank from saying “if you don’t opt in, you’ll have a monthly fee of $1?”

  6. ExtraCelestial says:

    I know I should be outraged (and I am, kinda), but part of me really wants to applaud them for such genius spin. Nick Naylor would be proud

  7. The Marionette says:

    That’s how bank of america is. They have overdraft protection but there are 2 methods of it. They either take it out your savings account or a credit card can be charged. Or they charge $35. Either way they’re taking the money out, it’s just that I think they need you to actually sign up for their service so they can actually charge your credit card.

  8. aja175 says:

    I wouldn’t mind paying the $30something fee so much if they actually covered the overdraft… My last transaction with HSBC was a $37 fee for an overdraft that they didn’t cover.

  9. vastrightwing says:

    ANYTIME a company (bank or otherwise) sends you a a notice, I assume they want you to agree to a new scheme where they can charge you more, while receiving less. I will read the fine print because my first reaction is they are going to try and scam me. If they are actually being responsive and informative, it’s a rare exception.

  10. Caveat says:

    I went to a TD branch last week to open up a checking account which has a lot of freebies if you are over 55. Basically I was not pushed into anything, just told that I had 2 options, overdraft protection or not. Obviously I chose no overdraft protection, but customers who are clueless probably will be asking “Wha is overdraft protection?”. The description will sound lovely and they will sign up for it, just like they did for mortgages that they could not afford. There’s a sucker born every minute and someone that will figure a way to take advantage of them is born every hour. Under Darwin’s theory of evolution, the suckers would starve to death and we would be left with a smarter gene pool, but that’s only in theory…

  11. TailsToo says:

    Banking – no innovations since the ATM. Their only business plan is to take advantage of the uneducated and desperate.

    • MFfan310 says:

      What about online banking then? That was an innovation, even in early versions that only worked with IE 4 or 5 and were built on Windows-proprietary ActiveX. Now people can check their balances and accounts anywhere-even on phones. And I don’t just mean smartphones: I know Chase has text message online banking for those of us without smartphones. (Do any other banks have the same?)

  12. COBBCITY says:

    Suprised the FDIC does not spot these things and order them taken down. Clearly designed to scare people back into the same practice the banks got in trouble for.

  13. Paintmann says:

    Chase has sent me 3 emails and 3 letters regarding this. Even tried to get me to sign up with a pop-up on my online account. I have a feeling this is just the beginning…

  14. scar4711 says:

    I am happy with my bank’s (US Bank) new overdraft fees when they start 8-15-2010. Anything totally under $10 for the day gets no fee, up to $20 will only be a 10 dollar fee, and then over that would be $35.00. Maximum of 3 fees a day.

    it’s still not good, but I wont have to pay 37.50 for a coffee. :)

  15. Black Bellamy says:

    Every single one of my CC sites does this ALL THE TIME. Log in, click NO, do banking. Log in, click NO, do banking. This has been going on every single day for the past whenever.

  16. INsano says:

    Chase was doing that too…then I moved to a local credit union. The c.u. has a link on their main page but doesn’t do a forced ad when you login to your account. F**k the banks.

  17. Osi says:

    http://www.truenorthfcu.org tries something somewhat similar. I got 4 notices in the mail about this and it’s all over their website and facebook site. No thanks, I dont like being scammed by the “bank”

  18. SerenityDan says:

    When I had to call to activate my new no raised numbered card they asked me if I wanted to sign up for it. They guy seemed genuinely shocked that I didn’t want the service.

  19. kataisa says:

    Every week Chase bank is sends me these fear-mongering notices in red block letters how I MUST ACT NOW to ensure overdraft protection on my debit card !!!!!! The deadline to respond is Aug. 31. I plan to continue to ignore them right up to and beyond Aug. 31. What a scam.

  20. RadarOReally has got the Post-Vacation Blues says:

    Just to be 100% correct here, the July 1 deadline is for NEW customers only. Banks can still overdraw existing customers without having their opt-in up until August 15. I’m afraid people will read the writeup and think they’re safe now, when they aren’t.

  21. nybiker says:

    Maybe they need the money to keep paying Regis & Kelly to be their shills (oh, sorry, spokespersons)? Also, there’s that arena they paid naming rights for, maybe the money will go to ensuring they can actually pay this year’s payment?
    Most likely, it’s just because they are greedy and want to keep sticking it to their customers.
    Just my opinion, I could be wrong.