Is it a legitimate customer service…or an albatross?
In my long bank marketing career, I can’t remember another product or service causing so much controversy as overdraft protection.
I am shocked to discover that the number of checking account debit card customers with ten or more overdrafts in the past year soared by 160%.
What are they hiding from us?
Or better yet, why are they hiding this information from us?
Because of Reg. E, there are legal and financial reasons for you to contact your bank customers or credit union members and ask if they choose to opt-in to overdraft protection for debit cards.
There’s also a practical (cost) reason why you want to know if they opt-out.
I’m shocked!
Until a few minutes ago, I had absolutely no idea that my credit union had provided me with overdraft protection known as “Courtesy Pay.”
Recently, Advertising Age magazine ran a short article that said public service announcements with an anti-binge drinking message for college students were ineffectual if the messages relied on shame as the incentive to quit. That reminded me, when financial institutions attach shame to one of their banking services it can have a severely negative effect.
That service is also one of the current hot topic issues in banking — NSFs.
Imagine, there’s a federal regulation that’s confusing people. Who would have guessed?
But it’s true. Regulation E compliance is generating confusing theories and ideas about how it should be handled. I found a few of these myths today in a newsletter from Strunk & Associates, a company that offers overdraft programs to financial organizations. I thought I’d repeat Strunk’s list so you’re aware and aren’t fooled if you hear this misinformation.
Myth 1: A senior regulator in the Midwest is saying you must give the consumer the ability to opt-out of one-time debit card and ATM overdrafts. This is NOT true.
Breaking news. Based on early consumer responses to a nationwide survey on the topic of overdraft protection, NSF fees, and opt-in, ACTON Market Intelligence has some preliminary results.
Read the press release to find out more.
In my opinion, the marketing folks at Chase Bank missed an excellent opportunity to share some good news with its checking customers.
I’ve been convinced for some time that a majority of bank marketers either have little or no familiarity with the economic concept of price elasticity or simply choose to ignore it.
20,000 Consumers Share Their Ideas About Banks’ Overdraft Programs and NSF Fees
February 15, 2010
Lincoln, NE – The Federal Reserve Bank projects that banks could lose nearly half of their overdraft protection customers after banks’ compliance with the Fed’s Regulation E. But Brian Beach, CEO of financial marketing firm ACTON Marketing, LLC, believes that such dire forecasts do not necessarily apply to the savvy bank marketer.
“If the future of the banks’ overdraft programs are dependent on the will of the consumer, we thought someone should study that will,” says Beach. “And that’s what we have our research division doing. From in-depth market understanding and concepts developed from the study, we can construct a marketing playbook for banks — strategies that optimize both response and positive opt-ins.”
A woman rushes into a supermarket to buy a few last-minute items for dinner. She’s in a hurry because she has other errands to run. She swipes her debit card at the checkout, but finds her card is declined.
She doesn’t have enough money in her checking account for the transaction. She ignored the opt-in form her financial institution sent, so she didn’t agree to overdraft protection for her debit card purchases.
By the way, have you heard about the overdraft opt-in that’s coming?
From the loud noise at your end, I’ll assume you have.Training, credit union marketing, Direct Mail, email notification, Federal Reserve Reg E, Financial marketing, marketing campaign, NSF, Opt-In, Overdraft, Overdraft coverage, Overdraft Fees, overdraft opt-in, overdraft options, Overdraft Protection, overdraft research, Reg E, Regulation E
What do you think is the biggest obstacle your financial institution faces as you try to get your customers to opt-in so their debit cards continue to be covered by overdraft protection?
The concept of procedural justice may come into play as you notify your customers about their options to Opt-In to overdraft protection for debit cards.
Basically, we will accept a less than perfect result if we feel the process that brought that result was fair.
• Convicted criminals who were given adequate attention from their lawyers were more accepting of the sentences they received regardless of their length.
There’s been a recent change in the Reg. E revision that favors financial institutions.
I hope you’ve heard about the Federal Reserve Reg. E change because it certainly affects every financial institution and the fees your company collects.
In the coming months, Overdraft Protection won’t be automatic. Any debit card purchase or ATM transaction must be denied if there aren’t sufficient funds in the checking account — unless the account holder “opts-in” to overdraft coverage. (Paper checks aren’t affected by the rule change.)
They’ll regret not having read the AMI Research first!
It appears the days of being customer-focused and customer-centric are over for a growing number of banks.
