US Warns Banks Against Charging Overdraft Fees Without Consent

The Consumer Financial Protection Bureau cautioned banks against extracting overdraft fees from customers without first obtaining their consent.

The US regulator published guidance to help enforcers stop banks from charging overdraft fees based on so-called “phantom opt-in” agreements, it said Tuesday. Those agreements arise when banks say they have customer consent to charge the fees, without any actual proof they obtained it.

Financial firms which levy overdraft fees for ATM and one-time debit card transactions without proof of consent could be in violation of the law — specifically the Electronic Fund Transfer Act, according to the guidance.

“The CFPB ...