Two consumer groups have issued separate reports on the steep charges that many people are hit with for overdrawing their bank accounts.

Banks have long charged customers for slip-ups such as bouncing checks. But there's a newer outrage: Banks are assessing penalty fees when their own electronic systems allow consumers to make purchases with their debit or ATM card, even though the account holder doesn't have the money to back up the purchases.

Overdraft penalties are assessed when a financial institution covers a check, ATM withdrawal or debit card transaction. When a customer finally makes a deposit, the bank takes the overdraft amount plus a fee, typically $20 to $35.

The Federal Reserve does not require institutions to consider overdraft programs as extensions of credit, and therefore the banks don't have to disclose that they are charging what amounts to high interest rates for them, argues the nonprofit Center for Responsible Lending in a new report, "High Cost and Hidden From View: The $10 Billion Overdraft Loan Market."

Overdraft fees often result in consumers being charged as much at 1,000 percent interest, according to the report.

For example, the center points out that if an overdraft fee were calculated as an annual percentage rate, or APR, a $22.50 fee for an $80 overdraft would amount to a 1,467 percent APR if the consumer reconciled the overdraft in a week's time. The Consumer Federation of America also issued a report that was critical of the practice of banks offering "courtesy" overdraft protection.

Traditionally, only a bank's best customers enjoyed the courtesy protection. More recently, banks have automated the process, allowing a wider range of customers to overdraw their accounts, making it more fair and consistent, according to Tracey Mills, senior manager for public relations at the American Bankers Association.

It's not the overdraft protection that bothers consumer advocacy groups. It's that many of these bank consumers aren't aware they are being charged when electronic transactions resulting in an overdraft are approved.

With today's technological advances, financial institutions aren't just being nice when they allow people to overdraw their account via an electronic transaction. Being nice — customer-friendly — would be to give people a warning that they don't have enough money in their account before processing a transaction.

"Large banks are increasingly allowing consumers to unwittingly overdraw their accounts and then hit them with hidden fees," said Jean Ann Fox, the CFA's director of consumer protection.

The CFA and the Center for Responsible Lending want federal regulators to require financial institutions to warn consumers when ATM and debit card transactions would overdraw their accounts and trigger fees.

The consumer advocacy groups argue that with such a warning, people could be given the option to cancel such transactions and save themselves a lot of money.

I agree that overdraft fees are outrageously high and that financial institutions should be forced to inform people when they are about to overdraw.

That would indicate the banks are committed to customer service.

However, many customers aren't innocent victims of the big bad bank.

"Overdraft fees can easily be avoided by keeping track of transactions," Mills said.