A woman has filed a bank overdraft fees lawsuit against Apple Federal Credit Union.

Plaintiff Chalet J. says Apple Federal Credit Union (FCU) charged her overdraft fees even when her transactions did not overdraw her account.

According to her complaint, the checking account contract she signed indicates that overdraft fees will only be charged “on transactions with insufficient funds to ‘cover’ a given transaction.”

Chalet says she was repeatedly charged overdraft fees on transactions despite the fact her monthly account statements showed her account balance was never in the negative to support an overdraft fee.

According to the bank overdraft fees lawsuit, Apple FCU is not authorized to charge overdraft fees on transactions that have not resulted in an overdrawn account, but it has charged such fees and continues to charge such unnecessary fees.

Opt-In Overdraft Coverage

Chalet says she has two checking accounts with Apple FCU and chose to opt-in to the credit union’s standard overdraft protection.

She has debit cards that allow her to have electronic access to her checking accounts to make purchases, payments and withdrawals. Apple FCU currently charges an overdraft fee of $29 for debit card transactions that send the account into overdraft status.

The bank overdraft fees lawsuit alleges that Apple FCU maximizes the number of overdraft fees it assesses by posting debit card transactions in a certain order, not necessarily chronologically, a fact that is not disclosed in the company’s Overdraft Privilege Disclosure.

Federal law (Regulation E) prohibits banks and credit unions from charging overdraft fees for ATM or non-recurring debit card purchases without explicit consent from the account holder. A study by the Consumer Financial Protection Bureau (CFPB) determined Regulation E helps protect consumers from predatory financial institution practices because ATM and debit card transactions are the most often used types of account transactions.

Overdraft policies that are in place to supposedly protect consumers actually are expensive to consumers, but are not risky to the financial institutions. Accounts that are opted-in for overdraft protection for ATM and debit card transactions experience as many as seven times as many overdrafts than the accounts that are not opted-in for these particular transactions.

Bank Overdraft Fees Lawsuit Cites Transactions

According to the bank overdraft fees lawsuit, Chalet incurred overdraft fees on the following dates in addition to several other occasions when her account had sufficient funds to cover the transactions:

• March 12, 2016: Chalet was charged three overdraft fees, two of which do not show her account was overdrawn.
• March 25, 2016: Chalet was charged three overdraft fees, none of which resulted in her account showing it was overdrawn.
• April 15, 2016: Chalet was charged three overdraft fees, two of which did not cause her account to become overdrawn.

The bank overdraft fees lawsuit indicates at least two “questions of law and fact common to the Class are whether Apple FCU:

• Applied overdraft fees on debit card transactions that did not result in an overdrawn account;
• Charged overdraft fees on debit card transactions in violation of the Electronic Funds Transfer Act.”

The Bank Overdraft Fees Lawsuit is Case No. 1:18-cv-00188-LO-TCB in the U.S. District Court for the Eastern District of Virginia, Alexandria Division.

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