Valley man doesn't like overdraft protection plan

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By Jim Carr By Jim Carr

PHOENIX -- Eric Distad says he usually keeps a pretty close eye on his bank account and his balance.
“I rarely have an issue with it because I have a feel for where I am at,” he said.

When he was on his computer not long ago, Desert Schools Federal Credit Union sent him a pop-up asking if he wanted to enroll in their overdraft-protection plan.

Distad did, but now regrets it after buying a 59-cent piece of candy for his granddaughter.

“I buy it for her.  Fifty-nine cents -- no biggie -- and out the door we go,” Distad explained.  “That's part of the series of transactions that bit me so badly.”

It turns out that 59-cent transaction turned into a $35 overdraft charge.  A $2 transaction later on at McDonald's turned into another $35 overdraft charge.

After a series of nine similar charges, Distad discovered he was stuck with a total of $300 in overdraft fees, all because he enrolled into that overdraft-protection plan.

“That's like somebody helping you while they're pulling money out of your back pocket,” he said.

Distad said he tried contacting Desert Schools Federal Credit Union, which agreed to reverse three of the nine charges, but that's it.

So, 3 On Your Side got involved. Desert Schools Federal Credit Union says this was a program Distad voluntarily enrolled in.  Although they eventually reversed three of the overdraft charges, they stand by their program.

As for Distad, he opted out this program so this kind of thing would not happen again.

“I'm guessing that like me, most people have not thought about that side effect of this kind of service,” Distad said.

Many financial institutions offer similar programs, but just remember it is voluntary and you can opt out if you want.  But know that if you do, your card may be declined.