How to get overdraft fees refunded (and avoid the next one)

First, how did the overdraft happen?

An overdraft happens when there isn't enough money in your account for a transaction and the bank pays it anyway. What you can ask depends on the kind of transaction, so start there.

What to say when you ask for a refund

Nothing in the CFPB pages we read says how to get a fee refunded. The agency's research does report what people did. In its data spotlight, some got a courtesy waiver, often for the first fee only, and some said they had better results in person or with a branch manager. So the ask is a favor, and it helps to be calm, short and specific.

"Hi, I'm calling about an overdraft fee of $[amount] on [date]. I've been a customer for [how long] and this doesn't happen often. [One sentence on what happened, such as a deposit that landed a day late.] Would you be able to refund it? If not, could you tell me who can?"

Two more things to try. Ask whether the fee was for a debit card or ATM transaction, and if so, ask when you opted in. And if the answer is no, ask to speak with someone else or try a branch. Write down the date, the name and what they said.

Rocket Money's help page says it can't negotiate overdraft or late fees for you. Its mobile app gives a conversation guide you read when you contact your bank. Wonderful works the same way in that respect: it never disputes anything on your behalf.

If you never opted in

Under Regulation E, a bank can't charge a fee for paying an ATM or one-time debit card overdraft unless it first gave you notice and got your consent. The CFPB's Ask page says that if you never opted in, you should ask your bank about the fee. It adds that if you don't believe you agreed to debit overdraft protection and the bank charged a debit overdraft fee, you can file a complaint with the CFPB.

The rule also says consent has to be separate from other agreements. A pre-selected check box, or account terms that merely mention overdraft, don't count. And a debit card purchase authorized when the bank reasonably believed you had the money can't carry an overdraft fee just because it settled when the account was short.

Opting in or out of overdraft coverage

For debit card and ATM transactions, the default is not enrolled. You have to say yes. If you did, you can change your mind any time. Regulation E says a consumer may revoke consent at any time in the manner made available for giving it. A bank can offer consent by form, phone or web, and the rule says you can end it the same way.

What changes if you opt out? The CFPB says debit card purchases and ATM withdrawals will generally be declined when you don't have enough money, instead of going through with a fee. The bank must give you the same account terms, conditions and features whether you opt in or not. Revoking doesn't get you back fees already charged. It won't stop fees on checks or online bill payments.

The CFPB's data spotlight found that some people didn't know they had the right to end overdraft protection for these transactions. It's a quick call.

How to avoid overdraft fees

• Set low-balance alerts and look at your balance before debit purchases. Both are on the CFPB's list.
• Link checking to savings. The rule treats a service that moves money from another account, such as savings, as different from overdraft service. The data spotlight adds that transfers may not cover the whole shortfall, so ask your bank how yours works.
• Ask about a linked credit line. Another item on the CFPB list.
• Compare accounts. The spotlight mentions second-chance accounts, BankOn accounts and some online banks that don't charge overdraft fees.
• Watch for slow settlement. A purchase can look fine on Tuesday and cause a fee on Thursday, after other payments clear. The CFPB's 2022 circular calls this authorize positive, settle negative, and says such fees are likely unfair when consumers would not reasonably anticipate them.

What the CFPB has said about overdraft fees

• It estimates that in 2019, bank and credit union customers paid about $15 billion in overdraft and non-sufficient funds fees.
• The Regulation E opt-in rule for debit card and ATM overdrafts took effect in 2010, according to the data spotlight.
• In an October 26, 2022 circular, it said overdraft fees on transactions people would not reasonably anticipate are likely unfair under the Consumer Financial Protection Act.
• The 2017 blog post cites 2014 CFPB findings that opted-in accounts were three times as likely to have more than 10 overdrafts a year, and had seven times as many overdraft fees.

We haven't listed what any bank charges. Fees differ and change, so check your own bank's fee schedule.