How To Get Overdraft Fees Refunded: A Step By Step Guide

If you’ve been charged an overdraft fee by your bank, you might be wondering whether it’s possible to get out of paying this amount. A lot of times, most people just pay the fee without ever questioning or contesting it. It should not be surprising then that according to the Center for Responsible Lending, banks took $11 Billion in overdraft fees in 2019.

The good news is that you can try to refund this fee especially if it’s your first time ever getting charged. Instead of just blindly paying the overdraft fee, you can follow this step by step guide on how to get an overdraft fee waived.

Why Am I Being Charged an Overdraft Fee?

Your bank will charge you an overdraft fee when you make a payment or withdrawal more than the amount available in your bank account. Instead of declining the transaction, the bank covers the payment anyway but it charges you a fee to allow the payment to go through.

For example, if you are doing your groceries and the total amount is $250 but you only had $240 in your bank account at that time, the bank will still let the payment go through but will charge an overdraft fee. This could save you a lot of hassle and could even get you out of a bind in case of an emergency, but it comes with the price tag.

Depending on your bank, the charges and conditions will vary before an overdraft fee is charged. If you are banking with Bank of America, you will be charged $35 even if you’ve just exceeded $1 per transaction. With Chase bank, you will only be charged a $34 “insufficient funds” fee if your bank account has been overdrawn by more than $5. There are some banks that charge lower fees but the amount usually ranges from $30 to $37. In most cases, you will only be charged a maximum of 3 to 4 overdraft fees per day.

While a $35 fee might not seem much if you’re making a big purchase, imagine if you make three separate small purchases in a day using your Bank of America debit card – a $3 coffee in the morning, a $5 burger for lunch, and a $1 bottle of water a couple of hours later. You should only be paying a total of $9 for those items but because you were not aware that you did not have sufficient funds in your bank account, you will be charged an overdraft fee three times that could amount to $105.Paying over a hundred dollars more for some minor purchases is a total waste of money, not to mention, illogical. Of course, the bank does not see it that way so it’s up to you to point that out to them by requesting that your overdraft fees be waived.

STEP 1 Prepare Your Account Information

Before you start dialing your bank’s toll-free number, slow down and make sure you are ready with all the information you need. The customer representative will usually ask you questions about your bank account details and the specific transaction where you were charged an overdraft fee. Make sure you know details like where you made the payment, the amount of the payment, and the date when the overdraft fee was charged.

Taking note of these details and having them ready in advance will help you sound more confident in your request. You can focus on what you need instead of trying to scramble through your bills or online banking history during the conversation to look for answers.

STEP 2 Call Your Bank’s Customer Service Department

After having the necessary information, look for your bank’s telephone number. This number will be indicated on your bank’s website or your bills. If you are banking with one of the major banks, you might find it more difficult to reach a representative. During the coronavirus pandemic, for instance, the high call volume resulted in wait times of up to three hours for many customers.

To avoid long wait times, try to call early in the morning. According to one study, call center wait times are 70% shorter on average before noon. While it’s advisable to call as soon as possible, it’s best to avoid calling on Mondays when phone lines are usually busier. Calling on a Wednesday or Thursday will get you faster customer service and the chances of having a less harassed agent are better. If you encounter an automated voice prompt, request to speak to a human agent.

STEP 3 Be Confident, Polite, and Firm in the Phone Call

If you’re being charged $35 extra for a $1 purchase, it’s understandable to feel upset but having a bad attitude will not get you anywhere. Overdraft fees apply to everyone and are automated so don’t take it personally and don’t take your anger out on the customer service agent. If you start snapping and blaming the agents for your overdraft fee, they will be less motivated to help you out.

It’s advisable to go into the phone call calm and confident. Assume a conversational tone when speaking with the customer service rep. Instead of being an irate customer demanding that they say yes to all your demands, talk to the agent as if you’re talking to a friend who is there to help you out. By being nice and polite, you can explain your request clearly. If the agent says no, you have to stay firm and persistent. Tell them that you’re disappointed with their decision without losing your temper. 

STEP 4 State Your Refund Request Clearly

If you want your overdraft fees refunded, you have to be clear about your request. What you need to do first is point out that you’ve been charged an overdraft fee. Say something like:

“I just noticed that I was charged a $35 dollar overdraft fee on (give the month and date).”

Then, instead of asking “Can I get my overdraft fees waived?”,  you should state your request by saying:

“I would like to have these overdraft fees waived, please.”

This way, you are telling them what you expect as a customer, and you will not sound vague or unsure of what you want to happen. Don’t voluntarily provide excuses on why the overdraft took place. Wait for the agent to give you an answer or to ask questions.  

If you’re lucky, the customer representative will just say yes and refund you immediately. However, this will not always be the case. Most times, the first answer that you will get is a no and an explanation of why.

STEP 5 Leverage Your Banking History

When you get a no, don’t give up immediately. Keep in mind that a bank is a business so they do not exist to cater to your every request. Of course, they will try to get away with not processing your refund as much as possible.

Some agents will go out of their way to explain why you got charged the fee in the first place or ask you a lot of questions. These are common tactics to make you think that since it is your fault, the bank was just trying to help you out and in exchange, the fee is small compensation for their trouble. The goal of the agent is to make you drop your request by thinking that they do not have a choice but to charge you this amount.

Don’t get distracted with all of these explanations. Listen quietly and say that you do understand the situation but stick to your point. Repeat your request and try to leverage your banking history as the basis for the refund.

Some of the things that you could say are the following:

“This is the first time that it has happened so I would like to have this fee waived…”

If this is the first time you’ve been charged an overdraft fee, you can convince them that this is a rare incident. The bank will also be more receptive to your request to refund the fee. However, if you’ve been charged overdraft fees countless times, you might be considered as a delinquent customer and they may not grant your request.

“If you look at my banking history, you can see that I’ve been a good customer so this is not a regular occurrence…”

Another negotiating point that you can use is if you have been an ideal customer of the bank. Even if you have not been banking with them for a long time, you can point this out. Banks don’t want to lose good customers so they may consider waiving the fee just to keep you satisfied.

“I’ve been with your bank for the past (number) years and I would appreciate it if you could waive the fee this time…”

The longer you’ve been with your bank, the more invested they are on you as a customer. If you’ve been with the bank for many years, make them realize this. You can even say that you are considering switching banks with better customer service policies as you are very disappointed about them not being flexible in this instance.

STEP 6 Hang Up and Call Again

Sometimes, no matter how convincing you are, you won’t be able to get a customer service rep to help you out. It usually depends on the mood of the agent, if the agent hasn’t done this refund before, or maybe the agent is too new to know that this is even possible.

If you’re not getting through a particular agent, don’t waste more energy. Just thank the agent and mention that you’ll call again to try to resolve the matter. Call again after a few hours or the next day and repeat the process again. Another agent may be more receptive to processing your refund request.

Another possible tactic is to ask the agent if there is someone else they can connect you with that could help you with the refund. This could be a senior manager or a bank officer in the branch. Some agents don’t welcome customers trying to bypass them but some will happily direct you to a manager.

STEP 7 Go to the Bank in Person

As a last resort, you could consider going to the bank in person to appeal the charge. When you’re requesting this personally rather than by phone, it makes it more difficult for the bank representative to say no to you as a customer.

While it may be easier just to pay the overdraft fee than going through the hassle of driving to your bank and lining up for the refund, it will still be worth the effort especially if you’re contesting multiple overdraft fees. Schedule your bank visit when you have other errands in the area to save some time.

How to Fight Overdraft Fees

Getting your overdraft fees waived is possible. If you are a good customer, you can overturn these fees and get them refunded by calling your bank to request for a refund. However, this may only work the first couple of times or if it occurs very rarely. Banks are less likely to refund you if you’ve been committing the same mistake every week or every few days.

The best way to fight and avoid overdraft fees is to always be on top of your bank account. You can install personal finance apps or sign up for phone notifications to inform you about your most recent transactions. This way, you can avoid spending over what you have in the bank.

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