Many of us at one time or another have been hit with overdraft fees when we didn’t have enough money in our checking account to cover a purchase.

Many of us have also been frustrated to pay $25-$35 for this fee when the amount our purchase exceeded our account balance was only by a few dollars.

Consumers have taken a closer look at overdraft fees, and government entities like the CFPB, or Consumer Financial Protection Bureau, have also gotten involved in looking at the practices and fees associated with overdraft programs.

UMB Bank overdraft charges have particularly been given closer attention following a settlement reached previously when the bank’s overdraft fee practices were questioned in a class action lawsuit.

What are Overdraft Fees?

When a consumer makes a purchase with a debit card (and sometimes also with bill payment, ATM withdrawals or automatic payments) and the purchase or withdrawal amount is greater than the amount of money in the checking account, causing the checking account to have a negative balance, overdraft fees may be assessed.

These fees are charges from the bank for covering the shortage of funds.

Essentially, the bank issues a very short term loan to pay for the purchase or withdrawal and charges the consumer a fee for the service.

Before July 2010, banks and credit unions could automatically enroll customers in an overdraft fee protection program and charge them the going rate for overdraft fees.

In July 2010, the Federal Reserve required financial institutions to get a customer’s express prior consent to enroll in an overdraft fee program.

Currently, overdraft fees across the country range from $10-$38, so these fees quickly add up and make up a large percentage of the revenue of many financial institutions.

The CFPB is looking closely at these fees nationwide.

UMB Bank Overdraft Charges

UMB Bank overdraft charges were the target of a class action lawsuit several years ago that accused the financial institution of employing improper practices when it assessed overdraft fees.

The allegations against UMB Bank claimed that the bank processed transactions out of order, rather than chronologically, and this caused customers to incur extra overdraft charges, to the financial benefit of UMB Bank.

The lawsuit claimed that UMB Bank processed the transactions throughout a particular day from largest to smallest.

In this way, the account was sent into the negative more quickly with a large transaction and each subsequent transaction pushed the account more into the negative.

UMB‘s customers whose transactions would have been processed chronologically may have only received a single overdraft fee assessed on their account, but when they had multiple purchases within a day, these individuals say they were unfairly charged multiple overdraft fees due to the reordering process used by UMB Bank.

The financial institution claimed that UMB Bank overdraft charges were fair and did not violate any laws, yet entered into the settlement to resolve any outstanding allegations against the company.

Joining a UMB Bank Overdraft Charges Lawsuit Investigation

Current UMB Bank customers are continuing to closely monitor UMB Bank overdraft charges, and some still continue to question the bank’s practices.

Lawyers are currently taking a closer look into the practices surrounding UMB Bank overdraft charges. If you have incurred UMB Bank overdraft charges and would like to be a part of the current legal investigation, an attorney can review your case at no charge.

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