A case in point is when the Bureau of Consumer Financial Protection in Washington, DC alleged that overdraft protection services targeted students at a university.
Inexperienced individuals are particularly vulnerable to excessive overdraft fees.
The cause of one complaint is that the bank misled checking account customers on a university campus into believing that overdraft protection was required on their checking account.
According to an article in lawyersandsettlements.com titled: “CFPB Moves to Protect Student From Overdraft Fees” by Anne Wallace (August 28, 2018)…. “Kids are heading off to college – hopeful, ambitious and Financially Naïve. Are they Ripe For Exploitation?”
Part of the problem, according to the article arose from student I.D. cards being linked to banking. “University-bank partnerships have come under CFPB scrutiny in recent years.”
In her article, Ms. Wallace cited a report by Pew Charitable Trust– “More than a third of frequent overdraft users — those who pay $100 or more in bank fees in a year for overdrawing their bank accounts — are in their late teens through early 30s.”
After reading this disturbing statistic, my researcher delved deeper into the issue of students and bank cards and found:
- Partnerships between local banks and universities are prevalent and representatives of banks are sometimes on campus during orientation to sign students up.
- Some banks offer special “student banking services”.
- Some Bursar’s offices can even offer direct deposit of student refund checks into the student’s account.
- A location on campus means that a bank can offer ATM services for quick and easy access to funds for students.
- Some student ID’s are also linked to banking services.
- One college website stated: “students should shop around for the bank that meets their individual needs.”
- One University went so far as to prepare a survey of bank fees and services to assist students with their banking decision.
Students need to learn financial independence, but there is a caution.
From the University of Michigan website- “For many students, college is the first time that they take responsibility for their own financial affairs. Parents can help with this adjustment by discussing expectations, setting ground-rules, and educating students about financial responsibility including budgeting, credit cards, and paying bills.”
One sure way to safeguard your student is to teach them good banking ‘habits’ well before they leave for college.
Working To Preserve Your Wealth and Protect Your Future…in a Constantly Changing World
Please read my full Disclaimer and How I Can Help You
Visit my website: www.attorneybarbaradalvano.weebly.com for over 780 articles and printable infographics