The client complained that Unibanka is forcing him to accept the service, and to cancel it he has to physically go the bank, the Latvian daily Neatkariga Rita Avize reported last week.
So far the automatic overdraft option was available only to Latvijas Unibanka credit card holders, but in the future some 100,000 debit card holders will also be able use it, withdrawing cash from ATMs or making purchases.
With the service customers will be able to withdraw more money than they have in their account or than their credit card limit allows – for a fee.
Latvijas Unibanka will charge 2 percent interest per month or 24 percent per year. The interest charges prompted the customer complaint.
He said he may activate the overdraft option inadvertently and then be forced to pay interest.
The Consumer Rights Protection Center official told to the newspaper that the client had a valid reason to complain about Latvijas Unibanka.
"It is a violation - disrespect to one's right of choice and will," said the center's consumer information and advertising supervision department head Inara Kanela.
She explained that under the law a person has the right not to receive services that he or she has not asked for.
The Consumer Rights Protection Center reported the complaint to the financial supervisory authority, the Financial and Capital Market Commission, asking it to suspend the service option that Latvijas Unibanka plans to offers its clients starting Sept. 17.
When the center contacted Latvijas Unibanka, the bank's representatives explained that there were more people willing to use the automatic overdraft option than clients refusing such service, leading the bank to offer it.
The consumer rights office, however, will insist that the service be canceled.
"We haven't violated any laws and haven't seen any written complaints from the clients," Unibanka's press secretary Haralds Burkovskis told The Baltic Times. "Automatic overdraft services are commonly available in the world, and we are the first in Latvia to offer it." Burkovskis said Unibanka is improving technical systems to allow clients to view their current account and overdrafts separately on ATMs starting in October. The financial supervisory authority spokeswoman refused to give any comments until a written complaint is filed with the Financial and Capital Market Commission. By Sept. 11, no complaints had been received.
All of Latvijas Unibanka's customers who have had an average monthly balance of 50 lats ($80) or more a month for the last six months will be able to get the overdraft service automatically.
The maximum amount of automatic overdraft is set by the bank at 250 lats.
Unibanka is the market leader in Latvia's payment-card market with 236,000 cards issued as of the end of August. Hansabanka follows with 235,000 cards.