Digital Federal Credit Union may be added to the growing number of credit unions who could be charging customers unfair overdraft fees.

One of the problems that consumers run into with certain credit unions is that they may charge too much for overdraft protection and consumers can rack up unfair amounts of fees, many times in excess of the original overdraft charge.

Even if a consumer makes a purchase that requires an overdraft, a credit union may charge an overdraft fee regardless of how small the original transaction was. Many banks charge upwards of $35 per transaction.

Overdraft Practices of Digital Federal Credit Union

Digital Federal Credit Union
out of Marlborough, Massachusetts, charges $30 per overdraft transaction, according to their website. “There is no limit to the total fees we may charge you for overdrawing your account,” the credit union explains on its website.

Under the “Standard Overdraft Practices” of Digital Federal Credit Union, it reads, “We may authorize and pay items that overdraw your account up to $1,500 at any one time and charge you a fee of $30.00 each time we pay an overdraft.”

Digital Federal Credit Union also notes, “To discourage this behavior and recover the cost of extra processing and collections efforts that overdrafts require, DCU charges $30 if an item is returned, $30 if an item is paid by overdrawing the account, and $5 to pay an item via a transfer from your Savings Account.”

Essentially, they admit their overdraft fees are in place in part to discourage bank customers from overdrafting their accounts.

Overdraft Practices in the U.S.

The problem with current overdraft practices of credit unions such as Digital Federal Credit Union and others is that financial institutions make a lot of money from overdraft fees alone.

One report from the Consumer Financial Protection Bureau (CFPB) says that close to $30 billion each year is collected from Americans from debit card overdrafts and non-sufficient fund charges.

With overdraft fees in place for each overdraft transaction, the fees can compound quickly.

The CFPB reports that some banks cap their overdraft fees or have programs that don’t allow for extremely minor debit card overdrafts. But, some banks will allow up to 12 overdraft and non-sufficient fund fees to be charged in a single day.

However, Digital Federal Credit Union has “no limit” on the amount of transactions they will charge for in a single day.

The Consumer Financial Protection Bureau also reports that the average consumer who has debit card overdrafts racked up $225 in overdraft fees in 2011. Many consumers paid much more.

Like most banks and credit unions, Digital Federal Credit Union has options to link another account to the debit account so that funds may be drawn upon in the case of an overdraft.

However, if you have been hit with excessive overdraft fees of if you feel as if you were charged unfair fees by Digital Federal Credit Union, you may be able to join a debit card overdrafts class action  lawsuit.

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