CHARLOTTE, N.C. — This holiday shopping season, Wachovia Corp. is reminding customers to sign up for overdraft services in case they swipe their debit cards too much.
The bank, now owned by Wells Fargo & Co., says it wants customers to be aware of their options and to help them avoid denied transactions. But the effort comes amid ongoing criticism of banks that charge debit card users overdraft fees.
Five community advocacy groups last month sent letters to Wells and JPMorgan Chase & Co. to express concern about the banks' overdraft practices. The organizations, which represent people of color and lower income communities, asked the two banks to join Bank of America Corp. and Citigroup Inc. in not charging overdraft fees on debit card transactions.
Wachovia's latest push follows efforts earlier this year by most banks to encourage customers to sign up for overdraft services that allow them to complete transactions if they don't have enough money in their accounts. Each overdraft can mean fees of up to $35.
A Federal Reserve rule, which fully took effect in August, required banks to ask their customers to "opt in" for these overdraft charges. Those who didn't sign up can't complete debit transactions if they're short on cash.
The fees have long been a sore spot for consumers slapped with $35 fees even if a small purchase, such as a cup of coffee, created a negative balance. Banks have also faced criticism for ordering withdrawals in a way that increases the fees they levy.
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