ACTON Marketing, LLC

March 26, 2010 10:19 ET

37% of Debit Cards Are Charged NSF Fees

Significantly Larger Number Than Estimates

LINCOLN, NE--(Marketwire - March 26, 2010) - Results of a nationwide survey of U.S. banking customers finds the size of the overdraft market -- those who pay NSF fees to a bank or credit union -- is significantly larger and more widespread than previously estimated by the financial industry.

In its nationwide survey of 20,000 U.S. adult heads of household, ACTON Market Intelligence found that of the more than 350 million U.S. debit card holders, 37 percent have had an insufficient funds transaction covered by an overdraft protection program within the past year.

Brian Beach, ACTON Marketing CEO, says, "Our financial clients sometimes see Regulation E as affecting only a small percentage of their overall customer bases. A study conducted by the FDIC prior to the current recession pegged overdraft users at only about 15 percent of the customer base. Our study shows that number is up significantly. Nearly four in ten bank and credit union customers have overdrawn their accounts in the last year and used their institutions' overdraft protection. So because of Reg. E, financial institutions must develop a wider effort to gather customer opt-ins than they previously considered."

The ACTON study, conducted in February and March 2010, also found the profile of the overdraft market has changed. Before the recession, the overdraft protection market was predominantly made up of light and moderate NSF users -- with a small number of heavy users accounting for the vast majority of overdrafts and NSF fees. As of March 2010, a majority of overdrafters remain light users (1 to 4 ODs per year). However, more than one-in-three of the overdrafters are heavy users, accumulating more than 10 overdrafts per year. That data suggests that some non-overdrafters became light users, and moderate overdrafters became heavy users -- which considerably widens the market affected by Regulation E.

Beach continues, "Not only are there more overdraft protection users in today's market, there are significantly more heavy users than previously believed. Conventional wisdom had five percent of a financial institution's customers accounting for about 80 percent of the NSF fees. As of March 2010, we find it's over twice that many who account for 75 percent of the overdrafts and fees. Simply put, the overdraft market is larger and more widespread than has been reported in the past. Banks and credit unions must target their Reg. E opt-in efforts to over a third of their customers because more than one-in-ten is a heavy overdraft user."

Who are the financial institutions overdraft protection customers? According to the ACTON Market Intelligence study, they appear to be relatively normal, everyday people -- most often 42 years old, white female, empty nesters, who tend to own rather than rent their homes, and have annual household incomes of $48,500.

Says Beach, "The stakes of the Reg. E opt-in are higher than a lot of institutions thought. Banks and credit unions assumed their opt-in marketing efforts should focus on a very small number of customers. In reality, the future of their overdraft protection programs hinge on the opt-in/opt-out decisions made by nearly four of every ten customers."

ACTON Market Intelligence is a wholly-owned division of ACTON Marketing, LLC, Lincoln, Nebraska. ACTON Marketing is a full-service direct marketing organization that provides complete direct mail programs for financial organizations pursuing new account growth. ACTON Marketing was the first marketing company to promote free checking. Using decades of proprietary data, knowledge, and experience, ACTON Marketing continues to offer successful strategies, creative, and production services to clients nationwide. Besides its Checking Account Customer Acquisition program and its new Opt-in and NSF marketing programs, ACTON offers strategies for New Movers marketing, pre-approved auto loans, CD retention, cross-selling and more. To learn more visit

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