For several years, there has been a steady trend among banks to increase the revenues they bring in from the overdraft fees that they charge patrons.

Some bank customers have questioned whether HSBC overdraft charges are unfairly assessed. Similar questions have been raised over the overdraft practices of Capital One and a handful of other banks and credit unions nationwide. These banking institutions are currently under investigation.

One possible reason for the increase in attention paid to overdraft charges could be that, with the onset of internet banking, people have been able to keep tabs on their daily bank balances easier.

What this means is that with access to daily account oversight, bank patrons may be less inclined to accidentally take their accounts into a negative balance state. Many banks have added in new fees in recent years, and some customers believe this is a way to earn money from savvier customers who are now avoiding overdrafts more effectively.

In addition to Capital One and HSBC overdraft charges, overdraft policies and practices from the following institutions are being investigated:

• First Hawaiian Bank
• UMB Bank
• Bank of Oklahoma
• People’s United Bank
• Commerce Bank
• Pentagon Federal Credit Union
• Boeing Employees Credit Union (BECU)
• Alliant Credit Union
• First Technology Federal Credit Union
• Star One Credit Union
• America First Credit Union
• Digital Credit Union
• Vystar Credit Union
• American Airlines Federal Credit Union

It has also been noted that the number of situations in which overdraft charges are applied has also been growing—from ATM withdrawals to debit card balances to hard-copy checks.

There is also a suspected deceptive practice known as transaction reordering underway in many financial institutions. Some customers allege this is happening without their knowledge.

Transaction reordering is simply this: out of a group of transactions affecting one account, the larger transactions are processed before the smaller ones. This practice may result in transactions being processed out of their true chronological order.

With the largest amount being processed against an account with limited funds toward the end of a pay period, the account balance will be drawn down to zero sooner. Then as subsequent transactions post, more overdraft charges can be levied. The likelihood that the account will arrive at a balance beneath zero prior to an influx of patron monies on payday is higher.

In the late summer of 2010, regulations were passed making it illegal for banks and credit unions to charge overdraft fees for certain transactions unless the banking customer has specifically agreed to join an overdraft protection program or similar coverage provided by the bank in question.

Overdraft fees are known by other names like “insufficient fund fees,” NSF, courtesy pay fees, and the like.

Other options for overdraft protection can be more friendly to the customer. Some institutions, with the customer’s consent, will automatically transfer funds from a linked savings account to cover a potential overdraft.

Sometimes, banks charge for the right to loan customers the money to cover this situation on a short-term basis while still allowing debit card transactions to process.

If you feel you have been the victim of high or excessive HSBC overdraft charges or NSF charges from other credit unions and banks, you could join a class action lawsuit investigation at no cost to you. Fill out our form and an attorney will be in touch to discuss your case with you.

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