Overdraft programs across the country, including those at First Technology Federal Credit Union, may use deceptive overdraft practices. Consumer advocates are looking into whether First Tech overdraft protection programs and others like it use a variety of practices to wring the most money they can out of their customers.

Sometimes, overdraft protection programs can charge unnecessarily high fees. Others can force customers into an overdraft protection program without even giving them the chance to opt out, later confronting them with significant overdraft charges.

The Basics of Overdraft Protection

First Tech overdraft protection
programs and similar programs are fairly standard practices, both at credit unions and banks alike. Such overdraft protection programs allow some cushion when a customer overdraws their account.

With overdraft protection, customers can still make those payments despite not actually having that money in their account. They are then charged an overdraft fee on top of the payment, which is used to cover the transfer of funds and labor.

In some cases, overdraft protection is undeniably useful. In others, however, when it is initiated without the required notice to the customer or accompanied by excessive fees, it can be a nuisance, and even cause significant financial trouble.

Some financial institutions use deceptive overdraft protection practices to charge their customers more fees at higher costs than they would have paid without the protection program at all. Overdraft protection programs have essentially become banking’s own side industry. Banks rake in billions each year from their overdraft fee programs alone.

Overdraft protection programs like First Tech overdraft protection may be misrepresented to customers in terms of the benefits they actually provide, or employees may fail to explain the details of the program entirely when a customer is initially signing up for their account.

Examining First Tech Overdraft Protection Fees

There are several methods that a bank or credit union can use to manipulate their customers into paying excessive amounts of overdraft fees. One of these deceptive overdraft practices is purposely reordering customer transactions.

This may seem silly or inconsequential, but the order in which transactions are processed can have a drastic effect on overdraft fees. Normally, banks process customer transactions in chronological order—that is, the order in which they are made. But some institutions purposely reorder transactions before processing, sometimes ordering them from highest to lowest payment. If all the large payments come first, each sequential payment made is more likely to overdraw the account sooner. After that initial overdraft, each payment on an overdrawn account will incur its own individual overdraft fee.

Unfortunately, it is often the customers who can least afford such fees that are charged most often. When a bank account consistently has less money in it, customers are naturally more likely to overdraw. Poorer Americans can routinely be hit with overdraft fees, and payments only get more excessive if overdraft programs, such as First Tech overdraft protection and others, use these kinds of deceptive practices.

Filing a Lawsuit Over First Tech Overdraft Protection Problems

Some customers who have been affected by programs like First Tech overdraft protection fees have begun filing legal challenges over these practices. If you have been subjected to unfair overdraft protection fees or deceptive overdraft practices from First Tech or another financial institution, you may be able to join a class action overdraft fees lawsuit.

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