Banks are aggressively marketing a new form of high cost credit intended to boost their fee income at the expense of the most vulnerable consumers. These products are based on overdraft protection, but are not traditional overdraft lines of credit or the occasional ad hoc practice where a bank will cover a consumer’s bounced check as a courtesy. Instead, they are deliberate, systemic attempts to hook consumers onto overdrafts as a form of high cost credit. To distinguish these products from traditional overdraft lines of credit and from the occasional, ad hoc coverage of an overdraft, we will refer to these plans as “bounce protection.”
more from the National Consumer Law Center.