HSBC and Capital One are currently under investigation regarding possibly unauthorized overdraft charges.

HSBC settled a class action lawsuit in October 2016 for $32 million. The settlement provided benefits to HSBC customers who incurred a minimum of one overdraft fee between December 2004 and June 2007.

Even though HSBC refused to admit wrongdoing in the case, the financial institution is again under investigation for allegedly deceitful programs designed to increase overdraft fees.

Unauthorized Overdraft Charges an Issue with Lyft, Uber Users

Ride-sharing companies such as Lyft and Uber use phone apps that automatically draft from a checking account or credit card that a customer has linked to the app. Some customers are surprised they incur unauthorized overdraft charges of $35 or more after taking a $10 ride.

Consumers are accusing Bank of the West and other financial institutions of charging overdraft fees without their consent. If a customer does not consent to overdraft protection, a requested debit is supposed to be rejected rather than paid. Payment of the transaction with overdraft protection means the customer gets hit with an overdraft fee.

Consumers argue that overdraft protection is for recurring items such as mortgage payments, car payments and insurance. They says that small non-recurring purchases such as Lyft and Uber rides, ice cream, haircuts and other non-essential transactions should simply be refused rather than incur an overdraft fee.

Bank of America recently settled a similar case regarding unauthorized overdraft charges.

Fees have increased steadily over the years as banks have made less money through interest. Unauthorized overdraft fees, ATM withdrawal fees, debit card fees, and checking account maintenance fees all help financial institutions profit from the customers they are intended to serve. For instance, an overdraft fee is generally the same cost whether an account is overdrawn by $15 or $100.

Banks and credit unions are facing investigations for making money off of the consumers who are living paycheck to paycheck. The people who are least apt to afford the fees are the ones paying them.

Unauthorized Overdraft Charges Disguised as Protection

Many banks sell their overdraft programs as “protection” programs. The banks insist the consumers are protected from the embarrassment and inconvenience of having a transaction declined at the point of purchase. Most consumers would probably rather have a small transaction declined rather than incur an overdraft fee.

HSBC and Capital One are among the banks currently under investigation for using overdraft practices that could lead customers to pay more in overdraft fees than they should have to.

If you believe you have been the victim of unauthorized overdraft charges by HSBC, Capital One, or any other financial institution, you could be eligible for compensation through legal representation.

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