Bank customers have filed a series of nationwide class action lawsuits against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank. The complaints were filed in the United States District Court for the Southern District of Florida in Miami. These lawsuits were brought against the banking industry for abusive overdraft fees.

Many bank customers are not aware that banks automatically enroll them when they apply for a debit card. The protection kicks in if the customer spends more than he or she has in the account to cover the purchase, up to a limit of a few hundred dollars. As a result, a person may be charged $30 when they have overdrafted their account by only a few dollars.

"Banks do not record charges and purchases on ATM or debit cards in the order they actually occur," stated plaintiffs' counsel Michael W. Sobol of Lieff Cabraser Heimann & Bernstein, LLP. "Instead, banks reorder the charges and purchases so that the largest charge or purchase is the first one paid by the bank. This manipulative practice is intentionally designed, the complaints allege, to maximize overdraft fee revenue."

"While all bank customers pay these fees, young people, the elderly and the poor, are the ones most affected," noted Mr. Rogow. "Moreover, these fees have the tendency to create a domino effect, resulting in even more fees."

In 2007, banks collected more than $17 billion in overdraft fees. That number nearly doubled in 2008, and in 2009 banks charged up to $40 billion in overdraft charges from nearly 50 million customers.

The Federal Reserve is stopping banks from automatically enrolling customers in overdraft protection programs. Starting on July 1, 2010, all banks will have to ask their customers to opt in to overdraft protection plans for ATM and most debit card transactions.