Signing up for Meriwest checking accounts at Meriwest Credit Union may lead to consumers being hit with excessive overdraft fees later down the road.

Some customers may not be made fully aware of overdraft protection practices while signing up for Meriwest checking accounts, leading them to opt into a service that they might not have used if they had known all the details. Still, others may not even be given the choice to opt out of overdraft protection while they sign up for their Meriwest checking accounts.

Meriwest Credit Union is just one of the many financial institutions across the country that may be using improper measures to increase the revenue they get by charging customers overdraft fees.

Basics of Overdraft Protection

Overdraft protection programs are common in banks and credit unions alike. These programs, including overdraft protection that go along with Meriwest checking accounts, afford customers a certain amount of cushion when they overdraw their account.

Instead of hitting the bottom of their account and not making their intended transaction, overdraft protection at Meriwest and elsewhere allows customers to actually make these transactions successfully. In return for this protection, customers are charged an overdraft fee to cover the transfer of funds.

Overdraft protection is not necessarily a bad thing. When used correctly—when customers are fully aware of how these programs work—overdraft protection can be extremely helpful. The associated fees may be worth the service overdraft protection provides. But for those who are not fully aware of how overdraft works or are not given the choice to opt out, overdraft protection may lead to excessive fees which, for some, can be a hassle. For others, overdraft fees can cause exacerbate financial problems.

Customers with a great deal of funds are far less likely to overdraw. For poor Americans routinely hit with excessive overdraft fees, an already difficult financial situation can become that much harder.

Banks rake in billions each year from their overdraft fee programs alone—essentially, overdraft protection programs have become their own side industry. Unfortunately, certain financial institutions may use deceptive practices to wring the most money they can out of their customers, or even trick them into signing up for an overdraft protection that they would not have opted into if they had all the relevant information.

Deceptive Overdraft Practices

There are a few approaches that banks and credit unions can use to get even more money out of their customers through overdraft protection programs.

When customers are initially signing up for an account, employees may either misrepresent the full scope of the overdraft program, fail to explain the details, or downplay the high prices. Customers may find that they are not even given notice that they can opt out of overdraft protection at Meriwest or elsewhere, and they may not even know that this option is available.

A bank or credit union can even intentionally reorder customer transactions to force them to pay more in overdraft fees.

Normally, banks process customer transactions chronologically, the order in which they are made. But some institutions can purposely reorder transactions before processing, sometimes ordering them from highest to lowest payment. If all the large payments come first, each sequential payment that a customer makes is more likely to overdraw the account. Each payment on an overdrawn account will incur its own individual overdraft fee.

Filing a Lawsuit Over Overdraft Protection Fees

Some customers who have been affected by deceptive practices have begun filing lawsuits against their banks and credit unions. If you have been subjected to unfair overdraft practices through overdraft protection at Meriwest after signing up for Meriwest checking accounts or even at another financial institution, you may be able to join a class action overdraft fees lawsuit.

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