We handle class actions and consumer protection cases. A consumer protection attorney represents people who feel aggrieved from a commercial transaction. See more on our class action and consumer page. One area where we help consumers is with credit union fees. Specifically, we bring lawsuits and class actions concerning overdraft fees when banks and credit unions deviate from the rules or law. We have written about this more in the past, see here:
Banks and Credit Unions Adding Excessive Hidden Fees – Bank Overdraft
A credit union lawyer can bring a credit union lawsuit to help consumers recover lost funds from a credit union overdraft. The same applies to a bank overdraft. Learn more here.
Fighting Back Against Unfair Overdraft Fees
Unexpected overdraft fees can be a frustrating and costly surprise for consumers. At our firm, we litigate to hold financial institutions accountable when they engage in deceptive practices that exploit their customers. Overdraft fees are intended to protect financial institutions, but when misused, they can drain hard-earned money from consumers without justification. Here, we’ll break down how these unfair practices work and what you can do if you’ve been affected.
How Overdraft Fees Are Supposed to Work
An overdraft fee is charged when a transaction exceeds the funds in your bank account, and the bank covers the difference temporarily. This service can be helpful in emergencies. However, some institutions manipulate the timing and processing of transactions to maximize fees—charging customers when their account balances were sufficient at the time of purchase or for transactions authorized on positive funds but settled into overdraft later.
Common Abusive Practices in Overdraft Fees
1. Charging for “Authorize Positive, Settle Negative” (APSN) Transactions:
Banks may approve a debit card transaction when your account has enough funds but later charge an overdraft fee when the transaction settles. This happens because they manipulate transaction posting order or hold funds in ways that confuse account holders.
2. Multiple Fees for a Single Transaction:
Some banks charge multiple fees for the same transaction by repeatedly resubmitting it after it is initially declined. For example, if a check or payment is returned for insufficient funds, the bank may process it again days later, charging a new fee each time—even though you only initiated the transaction once.
3. Hidden Contractual Practices:
Banks may obscure how overdraft fees are calculated in their account agreements, making it nearly impossible for consumers to avoid unexpected charges.
Real-Life Impact on Consumers
Our firm has reviewed cases where individuals were charged exorbitant overdraft fees:
- A customer was assessed fees on transactions that didn’t actually overdraw their account balance.
- Others faced multiple fees for a single transaction that the bank repeatedly processed without authorization.
These practices violate consumer protection laws and contractual agreements, causing financial harm to everyday account holders.
What the Law Says
Consumer protection laws, like the Maryland Consumer Protection Act and the Massachusetts Consumer Protection Act, prohibit unfair and deceptive business practices. Banks engaging in the above behaviors can be held accountable for breach of contract, unjust enrichment, and violations of these laws. Federal agencies, such as the Consumer Financial Protection Bureau (CFPB), have also labeled these practices as deceptive and unfair, resulting in hefty penalties against offending banks.
Why Class Actions Matter
If you’ve been affected by unfair overdraft fees, you are not alone. Class action lawsuits allow groups of people with similar claims to come together to challenge deceptive banking practices. These cases provide an opportunity for justice and compensation while holding financial institutions accountable for widespread misconduct.
Have You Experienced These Practices?
If you’ve been charged overdraft fees on transactions that didn’t overdraw your account or faced multiple fees for a single payment, you may have a legal claim. Our firm litigates to protect consumers like you. Contact us today for a free consultation to learn your rights and options. Call 855-KBA-LAWS (522-5297).