Legality of overdraft charges

Recently I had forgotten about an ACH withrawal that I had scheduled (i had scheduled it a couple of months ago) So when it came out of my account It cleared but my bank charged me a 25 dollar insufficient funds fee, well i had no idea that this had even happened so i thought I still had money in my account and continued to use my check card for various purchases. When I finally checked my account i saw that i was significantly overdrawn and had racked up 175.00 in insufficient fees charges(25.00 for each transaction). When I called my bank to get things straightened out the first thing I asked was why they would continue to let me use my card 7 times if i didn't have the funds to cover the purchases. They informed me that they sent a letter in May of 2007 informing members that there was a new program called "member privilege" that basically states that the bank covers purchases that would ordinarilly be denied due to insufficient funds and charges 25.00 for each transaction. If I did not want to be covered under this "privilege" I would have to contact the bank and let them know or else I would be signed up for it automatically. I don't remember ever receiving this letter, and am not sure if they can legally sign me up for such a program and charge me money for it without my permission. Any advice would be greatly appreciated.

Thank you,
Amanda
California