This is used to trap poor people. Joe Anonymous accidentally miscalculates the available balance of his checking account and makes a debit card purchase of gum for $0.99. His account balance is now -$0.23. PNC hits him with an overdraft fee of $25, and an additional daily overdraft fee each day until Friday (payday), bringing his balance into the negative by hundreds of dollars. Joe then has to choose between paying his rent and bringing his account current at PNC. After a month or so, PNC blacklists him and he can't open a bank account anywhere.
Not fraud as far as I can see. At least not on Joe's part.
With many banks, you can go to the bank and tell them to simply refuse payment of any overdraft, rather than granting it and charging you. Your card will then get declined if you don't have enough in your account.
The automatic overdraft "protection" scam was recently made illegal. Now you have to opt-in to have overdrafts covered.
Banks made a ton of money off of this, so this is another reason why they are trying to find new ways to raise revenue. At least a $5 fee is out in the open, and consumers can choose.
Not fraud as far as I can see. At least not on Joe's part.