NBT Bank unfair NSF fees $4.25M class action settlement

NBT Bank agreed to a $4.25 million settlement to resolve class action lawsuit claims it charged customers unfair nonsufficient funds (NSF) fees.

The settlement benefits current and former NBT Bank customers who were charged certain NSF fees between Dec. 4, 2013 and Nov. 30, 2021.

In 2022, NBT Bank was ranked by Forbes as one of the best banks in the world. The bank provides services such as personal and business accounts and various types of loans.

According to a class action lawsuit, NBT Bank charges unfair NSF fees through deceptive business practices. Specifically, plaintiffs in the class action lawsuit challenge the bank’s “APPSN” fees and “retry” fees.

Authorize Positive, Purportedly Settle Negative, or APPSN, fees allegedly occur when NBT authorizes customer accounts for transactions when there is a sufficient balance but later declines these transactions due to an insufficient balance. When denying APPSN transactions, the plaintiffs say NBT Bank charges unfair NSF fees. 

Retry fees are allegedly charged to customers when transactions are resubmitted to NBT Bank after being denied due to insufficient funds. According to the bank fee class action lawsuit, these transactions result in multiple NSF fees for the same transaction which can quickly pileup.

The NBT Bank class action lawsuit contends that these fees are unfair and violate the bank’s own account agreements. The class action also includes claims under consumer protection laws.

NBT Bank hasn’t admitted any wrongdoing but agreed to resolve these allegations with a $4.25 million settlement fund.

Under the terms of the settlement, class members can receive a payment based on the number and types of fees they were charged. Sixty-nine percent of the net settlement fund will be used to fund payments for APPSN fees, while 31% of the net settlement fund will be used to refund retry NSF fees. Exact payments will vary but will represent a proportional share of the settlement fund based on each class member’s share of the total number of fees charged.

Current customers will receive their settlement payment as an account credit while former customers will receive their settlement payment as a check.

In addition to funding the settlement, NBT Bank will forgive nearly $1.5 million in uncollected fees that were assessed by the bank but charged off when the account was closed.

The deadline for exclusion and objection is Aug. 30, 2022. 

The final approval hearing for the NBT Bank NSF fees settlement is scheduled for Sept. 29, 2022.

No claim form is required to benefit from the settlement. Class members will automatically receive a settlement payment or unpaid fee forgiveness if they do not exclude themselves.

Who’s Eligible

The settlement benefits current and former NBT Bank customers who were charged certain NSF fees between Dec. 4, 2013 and Nov. 30, 2021.

Potential Award

Varies

Proof of Purchase

No proof of purchase applicable

Exclusion and Objection Deadline

08/30/2022

Case Name

Lowe et al. v. NBT Bank, N.A., Case No. 3:19-CV-1400, in the U.S. District Court for the Northern District of New York

Final Hearing

09/29/2022

Settlement Website

LoweOverDraftSettlement.com

Claims Administrator

Lowe et NBT Bank Settlement Administrator
P.O. Box 5478
Portland, OR 97228-5478
855-604-1706

Class Counsel

Jeffrey Kaliel Esq
KALIELGOLD PLLC

Brian E Whiteley Esq
BARCLAY DAMON LLP

Defense Counsel

Teresa M Bennett Esq
Kayla Arias Esq
NBT BANK NA