Banks such as HSBC have long been accused of ripping off customers with the high charges they impose for minor account problems. Yet, despite new federal regulations and consumer lawsuits aimed at HSBC deceptive overdraft fee practices, many customers are still victim to excessive and costly HSBC overdraft fees.

HSBC is a British-based multinational public banking and financial services company.  HSBC, which is an acronym for Hong Kong and Shanghai Banking Corporation, is the world’s fourth largest bank by total assets.

The bank is under scrutiny for its allegedly improper HSBC overdraft fees and has even settled litigation involving such accusations.

What are HSBC Overdraft Fees Practices?

According to their online disclosure, HSBC standard overdraft practices include authorizing and paying overdrafts for checks and overdrafts for preauthorized automatic bill payments.

HSBC says it does not authorize and pay overdrafts for ATM and everyday debit card transactions for consumer checking accounts other than HSBC Premier unless the customer is using an overdraft protection plan to cover these transactions.

Under the bank’s standard overdraft practices, customers can be charged HSBC overdraft fees associated with Insufficient Funds (NSF) or Unavailable Funds (UNA) in the amount of $10 per day depending on the type of checking account the customer has.

Additionally, HSBC states that a customer’s “account may be debited on the day an item is presented, or at such earlier time as notification is received by the Bank by electronic or other means, that an item drawn on your account has been deposited for collection in another financial institution.”

Further, the disclosure states that “the Bank reserves the right to pay items into overdraft, to impose overdraft fees as permitted by law, and to apply any later deposits (including direct deposits of social security or other government benefits) to those overdrafts or overdraft fees, by way of setoff.”

The method HSBC uses to order items for a customer’s account is also spelled out on their website. For each business day, the bank will first add deposits and credits to an account.

Second, HSBC will subtract from available balance account withdrawals performed at the branch from lowest to highest dollar amount.

Third, the bank will subtract from available balance transaction amounts that are authorized based on the available balance at the time the transaction was performed in lowest to highest dollar amount. Transactions include everyday debit card transactions, ATM withdrawals, and online transactions.

Last, HSBC will subtract all other items in lowest to highest dollar amount.

HSBC Overdraft Fees Class Action Lawsuit Investigation

Since July 1, 2010, banks are required to ask new customers if they wish to opt in to overdraft protection. There is no legislation regarding how much money can be charged for overdraft fees and many consumers are not aware of their options when it comes to overdraft.

According to the Consumer Financial Protection Bureau, some consumers who opt in to an overdraft program may pay more than seven times as much in overdraft fees.

An overdraft fee class action investigation has been launched in response to consumer reports that many of these financial institutions have unfair overdraft fee practices, including HSBC Bank.

Consumers who suspect they are being charged improper HSBC overdraft fees may want to consider speaking with an attorney, who can help determine if the charges were proper or improper and advise about possibly bringing an overdraft fees lawsuit.

Note: Recent or current HSBC customers who suspect they may have been charged improper overdraft fees may need to provide bank statements to overdraft attorneys, but this information will be kept private and confidential.

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