LINCOLN, Neb.-The biggest challenge for credit unions and banks in getting consumers to opt-in to overdraft protection plans by this summer's deadline is to make sure consumers pay attention to the forms and do not routinely discard them, according to a new survey.
The survey, conducted by ACTON Marketing, found that of the 37% of debit card users that have overdrawn their accounts this year, a significant portion of those using overdraft protection-habitually throw out information sent by their credit union or bank. When asked what they likely will do with the overdraft opt-in form, 30% of the overdraft protection users said they will most likely throw them out, meaning there could be a lot of consumers taken by surprise.
"More overdraft users will be opted out of their overdraft protection programs this summer due to not responding than overdraft users who will consciously opt-out because of high fees," said Brian Beach, CEO of ACTON Marketing. "Our research confirms that if a bank or credit union sends out only the opt-in form, without previous info-marketing in place, almost a third of their overdraft customers will likely not respond and will be opted out."
Could Lead To Upset Members
The findings should be noted by credit unions and banks, said Beach, because those consumers will not have overdraft protection when they overdraft, will start to have their retail purchases denied and most likely will move their accounts elsewhere.
"The psychology of overdraft users is such that they are extremely averse to having their debit card transactions denied at retail," said Beach. "If they begin to be denied, they will not just re-opt-in with their current bank or credit union. Most likely they will cut and run."
The study finds that 30% of overdraft protection users can be expected to opt-out. The study was based on a survey of 20,000 adult heads of household and was conducted in March.
