The Consumer Financial Protection Bureau is looking at how U.S. banks persuade customers to sign up for what they call overdraft protection programs, which some critics say are confusing and overcharge consumers, according to a Bloomberg News report.
The agency’s inquiry -- which looks at nine banks, including JPMorgan Chase, and Bank of America -- is focused on the online and mailed marketing material that these banks distribute, as well as scripts used by the banks’ customer-service representatives, to assess whether the information is confusing to consumers, the report said.
The probe comes two years after regulators gave Americans more control of overdrafts on their checking accounts and is designed to determine if those regulatory changes went far enough.
Consumer groups have long said that overdraft protection plans tend to boost bank profits rather than actually protect bank consumers.
These groups argue that the penalties banks charge are too high, and that the rules and regulations are too confusing for consumers, many of whom automatically are enrolled without understanding the possible disadvantages.
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