For struggling Orange County residents, new consumer credit protections a mixed bag of goods
New regulations on how banks and gift card issuers can assign fees went into effect on Sunday. While they do offer consumers a veil of protection by requiring better communication in how and when overdraft and “activation” fees are issued, they do not reverse or amend the strategy of paying highest-to-lowest charges most banks practice.
It is this practice, which maximizes a bank’s ability to charge overdraft fees, that most hurts consumers, particularly those who carry a low-balance account, according to an article in the Los Angeles Times.
Our Riverside bankruptcy lawyers and consumer protection attorneys fight for the rights of consumers who have been mistreated by banks, credit card companies, debt collectors or other businesses. The consumers most devastated by these kinds of charges are working class families who use their ATM cards, pay their bills on time, and work to set money aside for college educations for the kids and retirement for themselves.
Given the 9.8 percent joblessness rate in Orange County and a five-year spike in bankruptcy filings in the first quarter of 2010 alone, many Santa Ana and Riverside residents and consumers struggling to manage out-of-control debts on limited and diminished incomes are now seeking advice from Orange County bankruptcy attorneys with the hopes of better understanding their rights regarding bankruptcy and consumer debt.
Anyone with an ATM card knows that keeping track of your real-time balance can be a challenge. When a bank employs this higher-to-lower pay-out method, they are basically depleting your account of funds that may otherwise be available to cover multiple smaller charges.
What happens next is your account is then dinged with a $35-39 overdraft fee for each little charge, instead of one overdraft charge on a bigger ticket item. So, they cover your car payment, for example, but that gas purchase and run to the grocery and doctor visit co-pay comes with an overdraft fee that quickly adds up to hundreds of additional dollars.
What most consumers and certainly consumer protection advocates would rather see is a return to the chronological system of balancing consumer accounts wherein charges are processed in the order they are incurred.
