The attorneys at Montgomery Ponder are investigating cases related to “extended” overdraft fees and improper interest charges by banks and credit card companies on customers’ accounts. Affected customers allege that their banks use a series of deceptive practices that push customer accounts into overdraft, allowing for the charging and collecting of overdraft fees.
What is an Overdraft Fee?
An overdraft fee is charged when a payment or withdrawal from your bank account exceeds the available balance, and your bank then covers the balance as part of an overdraft protection service. After covering this balance, your bank applies a fee.
In addition to paying this fee, you also have to pay back the amount that your bank lent you to cover the transaction. Bank account holders must opt into overdraft protection before a bank can perform this action, as required by federal law.
Overdraft fees average around $34 per overdraft for banks, and the Consumer Financial Protection Bureau estimates that overdraft and nonsufficient funds fees together cost Americans $17 billion annually. These fees amount to the single largest banking related expense for consumers who own a checking account.
How Do I Know I Have a Lawsuit?
Excessive bank overdraft fees lawsuits have been filed and/or settled against a variety of banks, including Wells Fargo, Bank of America, M&T Bank, HSBC, UMB Bank, and Wachovia. The lawsuits allege that banks charge excessive overdraft fees when customers' accounts go into overdraft. They further allege that the banks use a number of unethical practices to push their accounts into overdraft, such as misrepresenting customers' account balances and reordering debits and credits to accounts.
Deceptive practices that are alleged to have been used include:
- Authorization holds
- Non-recurring transactions
- Irregular deposits
- Transaction reordering
- Extended overdraft fees
- Unauthorized overdraft protection
If you or a loved one has been taken advantage of by being charged excessive overdraft fees by your bank or credit card company, contact Montgomery Ponder, LLC at (205) 377-5004.