By Ray Birch
LAKE FOREST, Ill.—Following a new study that revealed many banks and credit unions are sharing inconsistent and often inaccurate information on their fees via their websites and call centers, a new report has now found overdraft information is not shared at all by many FIs in their digital media.
The report also reveals credit unions are doing a better job than banks of disclosing overdraft fees on their websites.
While the median overdraft price remains at $30—a report by Moebs $ervices reveals 52% of depositories do not provide their overdraft pricing on their sites.
“The median overdraft price has not changed in seven years,” said Michael Moebs, economist and CEO of Moebs $ervices. “Very few products or services are this stable for this long. Yet there is a wicked undercurrent in overdrafts, with more than 50% of banks and credit unions not reporting their OD price.”
The Moebs overdraft study includes all depositories $500 million and greater.
The overdraft “undertow,” according to Moebs, is the lack of transparency in overdraft data.
“This lack of proper compliance at the website with 52.7% showing no OD information shocked us,” said J.V. Proesel, who was in charge of the study. “It is hard to believe a consumer cannot go to their bank or credit union’s website and obtain common prices, such as overdraft fees. It’s even harder to believe another 4.5% of inquiries shows the website price is different than price provided by the branch.”
One Strong Difference
Michael Moebs
There is a strong difference between banks and CUs when it comes to accuracy of branch and web info, the study shows. Only 29.2% of banks provide OD information in branch matching what is on their website.
“This contrasts greatly with a 69.1% match for credit unions,” said Moebs. “More than 66% of banks do not disclose the OD price on their website or offer much overdraft information on their website at all. This contrasts sharply again with credit unions, with only 24.2% who do not post OD price information on their website.”
Where credit unions fail, explained Moebs, is with no match or inconsistent information available on the website and via the branch.
J.V. Proesel
“CUs do not match with overdraft information 6.7% of the time versus 4.4% for banks,” he said. “But more importantly, overall these mismatch numbers for all banks and credit unions are too high. These mismatch numbers should be less than 2%.”
Very Harmful
The overdraft study exposes a very harmful condition with overdrafts, especially for the banks, Moebs said.
“How can depositories expect to have their services purchased if they do not tell the user what the price is? How long would Amazon and Walmart stay in business if they didn’t display the price of their products half the time?” said Moebs.