You know you are losing the PR battle when headlines like this begin to appear:

The point of Tuesday's column from MSNBC's Bob Sullivan, is that consumers fear overdraft fees more than fraud. Hmmm….would that have anything to do with the fact that customers PAY for overdraft fees while the bank picks up the tab for most fraud?

But even overlooking that minor piece of common sense, how does annoyance at overdraft fees equate to being "scarier than criminals?" The headline does a disservice to Sullivan's well-researched and thoughtful column.  

What Banks Should Do
While the headlines will hopefully be a bit more objective, expect more of the same in the coming year. Overdraft fees are becoming a big story. And as the 2008 election cycle kicks in to full gear, expect more grandstanding from politicians on both sides of the aisle. No one wants to be on record as being "for" overdraft fees, or any bank fee for that matter.

Banks need to do two things to head off a PR disaster and avoid pricing caps and/or more regulation from Congress:

1. Look hard at overdraft fee policies including both size and timing of the charges. And if you do find a way to cap/lower or lower overdraft fees, wrap that news in a big bow and deliver it to your customers for the holidays. And if you have a lower fee than the big banks in your market, by all means, let your customers know.  

2. Proactively sell overdraft protection options and balance-awareness services such as online/mobile banking and low-balance alerts via email and text message.

And one more thing:

In press interviews and marketing messages, eliminate all references to "courtesy" and "a service for our customers" in describing overdraft fees. Stay on the message that the onus is on the customer to track their balances. Here's a great response, ABA congressional testimony quoted in the MSNBC article:

The bottom line is that customers are in the best position to know what their actual balance is — only they know what checks they have written, automatic payments they have authorized and debit card transactions they have approved," Nessa Feddis, a spokeswoman for the American Bankers Association, said during congressional hearings earlier this year. "Simply put, consumers are in control of their finances and can avoid overdraft fees.