Bank of America has announced a pilot program that will allow a customer to approve a declined transaction via text message when there is not enough money in the account. If they approve the transaction the customer will be charged a $35 overdraft fee. In order to participate, the customer must enroll in the program ahead of time. BOA will also not charge the fee if the money is replaced by the end of the day.
Last year regulatory changes went into affect for all banks that prevented overdraft fees without a customer's active consent. In response to this, BOA simply started declining transactions that would overdraft an account. This of course significantly cut into the huge fees that were being racked up by BOA and other banks.
While I don't recommend anyone intentionally opt in to overdraft fees, the approach seems quite fair. The customer is opting into the program and then agreeing to the charge on an individual transaction basis each time. I must give BOA credit for the use of technology to enable options for the customer while generating a new revenue stream for them.
I am sure there will be some who criticize this program as taking advantage of lower income customers who live within thin margins. However, I am a believer in accepting responsibility for your actions. After opting into the program and then approving each transaction this clearly meets the definition of active consent.
If the pilot succeeds I believe we will see this same model roll out at other banks fairly quick. After all, why miss out on another revenue stream. Congratulations to BOA for thinking out of the box.
No comments:
Post a Comment