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Bank Overdraft Fee Lawsuit

Bank Overdraft Fee Lawsuit

Unethical banks and credit unions have paid millions of dollars in class action lawsuit settlements for charging excessive overdraft fees.

What You Can Do & How We Can Help

The Schmidt Firm, PLLC is currently accepting bank overdraft fee cases in all 50 states. If your bank or credit union charged you excessive fees for insufficient funds, you should contact our lawyers immediately for a free case consultation. Please use the form below to contact our Class Action Litigation Group or call toll free 24 hours a day at (866) 920-0753.

What Are Bank Overdraft Fees?

Financial institutions charge overdraft fees when a customer’s account does not have enough money to cover the transaction from a debit card, ATM withdrawal, automatic bill payment, or paper checks. The fee is $30 on average, even when the overdraft is much less than $30.

Banks Made $30 Billion Off Overdraft Fees in 2017

Overdraft fees are a major source of financial pain. Consumers paid $34.3 billion in overdraft fees in 2017 alone, according to data from the Federal Deposit Insurance Corporation (FDIC).

How Banks Maximize Overdraft Fees

Here are some common abusive practices that banks use to maximize their profits from overdraft fees:

  • Charging extended overdraft fees in addition to per-transaction overdraft fees
  • Re-ordering transactions to trigger more overdraft fees
  • Allowing 5 or more overdraft fees to be charged per day
  • Posting deposits irregularly
  • Back-dating transactions
  • Charging overdraft fees on pending transactions
  • And more

Processing Transactions Out of Order

Unethical banks might process transactions in the order of highest dollar amount to lowest, which maximizes the odds of an overdraft fee, rather than processing each transaction chronologically.

For example, say you have $50 in your checking account. One day, you make purchases of $5, $10, and $100, in that order. Your account was only overdrawn on the last purchase, but your bank processes the $100 purchase first — causing three overdraft fees instead of one.

Bank Overdraft Fee Lawsuits

Massive banks and small credit unions alike have been hit with lawsuits for charging excessive overdraft fees, or re-ordering transactions to boost the odds of an overdraft. Here are examples:

  • American Savings Bank
  • Bank of America
  • Capital One
  • Chase Bank
  • Citizens Bank
  • HSBC
  • JPMorgan
  • M&T Bank
  • Navy Federal Credit Union
  • PNC Bank
  • TCF National Bank
  • TD Bank
  • United Federal Credit Union
  • UMB Bank
  • USAA
  • Union Bank of California
  • Wachovia
  • Wells Fargo
  • And many more

Overdraft Fee Class Action Lawsuit Settlements

In June 2019, TD Bank paid $70 million to settle several lawsuits for allegedly charging excessive fees.

In April 2019, Navy Federal Credit Union paid $24.5 million to settle a lawsuit for charging excessive overdraft fees and “holding” funds to cause overdrafts.

In November 2017, Bank of America paid $66.6 million to settle a class action lawsuit accusing it of collecting illegally high interest rates, disguised as fees, from customers who let their checking accounts remain overdrawn for a few days.

In March 2015, HSBC paid $30 million to settle claims that the bank re-ordered transactions to maximize the odds of causing overdraft fees.

In May 2013, Wells Fargo paid $203 million to settle a class action lawsuit for re-ordering transactions to maximize the odds of causing an overdraft.

In March 2011, Bank of America paid $410 million for re-ordering transactions to maximize the odds of causing an overdraft.

Do I have a Bank Overdraft Fee Lawsuit?

The Schmidt Firm, PLLC is currently accepting bank overdraft fee cases in all 50 states. If your bank or credit union charged you excessive fees for insufficient funds, you should contact our lawyers immediately for a free case consultation. Please use the form below to contact our Class Action Litigation Group or call toll free 24 hours a day at (866) 920-0753.

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