After months of banks’ efforts to explain new opt-in policies for account-overdraft protection, 60% of consumers surveyed last month were aware of pending changes in debit card overdraft services on existing accounts mandated by new federal rules, according to new data from Mintel Comperemedia, which surveyed 1,000 U.S. adults online. That was up from 40% who were aware of the changes during a similar survey Mintel conducted two months earlier.

Banks blanketed consumers with direct mail, e-mail and website communications to communicate the changes, but the results were mixed, Susan Wolfe, the Chicago-based marketing firm’s vice president of financial services, tells PaymentsSource.

“The fact that 60% of consumers were aware of changes in their debit overdraft policies is not bad because it’s been covered pretty well by the media, but when you drill down to see what consumers really understand about their options, most are hazy,” Wolfe contends. “The fact that consumers are not completely aware of these services, or clear about the details, means banks have more work to do in promoting these services.”

As of Aug. 15, bank customers must opt in to receive debit-overdraft coverage on existing accounts or risk having debit transactions declined at the point of sale. Most banks’ new overdraft-coverage programs require the customer to link their debit account to a savings account or credit card. Fees typically average about $10 for each day the account is overdrawn.

Banks were required to get new customers’ permission for overdraft protection beginning July 1.

Many banks previously offered overdraft protection automatically and charged fees averaging about $35 per overdrawn transaction.

The overdraft-protection changes are the result of new Federal Reserve Board rules pertaining to Regulation E of the Electronic Funds Transfer Act (see story). 

Mintel found that 26% of consumers surveyed in July had opted in to receive overdraft protection, and another 26% said they planned to so.

The findings were in line with expectations, Wolfe says, noting only 18% of respondents said they had overdrawn their debit accounts within the previous six months.

“Typically, a small portion of all debit customers–less than 20%– drive about 80% of overdraft-fee revenue for banks,” Wolfe says.

Banks still have “significant opportunities” to promote debit-overdraft protection to consumers that have not yet opted in to receive it, she notes.

“Some banks did a better job than others of communicating options to customers,” Wolfe says. “We found is that each customer has a preferred channel, whether it’s a message delivered through the ATM, a message when the customer logs on to the banking website or direct contact with a branch employee. Banks should make sure they are reaching out to all customers through appropriate channels to clearly explain the options because there are many consumers who apparently are still unsure of their choices.” 

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