ConsumerWatch: Overdraft Fees Put Hospital Patient In Poor Financial Health

SAN FRANCISCO (CBS 5) - A Bay Area patient recently came home from a long hospital stay to find 47 bank overdraft fees totaling more than $1,600.

"I was totally out of commission. I wasn't going from store to store, writing checks," said Jack Murphy.

Murphy's bills – many of which were on automatic payment -- didn't get paid.

"The insurance that pays for my medications came close to being cancelled and my credit score went from excellent to fair," Murphy said.

After appealing to his bank, Wells Fargo, Murphy contacted ConsumerWatch. Long-time ConsumerWatch volunteer Gerald took on the case.

"Their first response was 'we are following the letter of the law,'" Gerald said.

After a few more calls, the bank was willing to make a concession. Last week, Wells Fargo credited Murphy back the full amount it had deducted in fees.

New federal rules intended to limit out-of-control overdraft fees now require customers to "opt-in" for overdraft protection, instead of "opting-out." However, automatic payments are processed whether you opt-in or opt-out of overdraft protection.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)