A member of Digital Federal Credit Union alleges she and other members were harmed by unfair DCU overdraft protection practices.

DCU overdraft protection is supposed to help prevent consumers from experiencing embarrassments like card decline and overdrawn accounts, but it has allegedly caused financial stress for some consumers.

Overdraft protection allows a financial institution to advance funds to a customer to prevent a transaction from being declined. Other types of overdraft protection may transfer the consumer’s own funds to the checking account from a linked savings account.

Overview of DCU Overdraft Protection Allegations

Complaints about DCU overdraft protection have already spurred legal action, including a class action lawsuit filed by a woman from Massachusetts. Plaintiff Brandi Salls had sought to represent herself and other consumers who allegedly suffered damages from DCU overdraft protection.

According to the claim, Salls was hit with overdraft fees even though there was still money in her account. Salls says she signed two agreements detailing DCU overdraft protection terms, both of which stated that overdraft fees would only be charged if her account was too insufficient to cover the transaction. But she says the credit union ended up charging her fees that were not consistent with the terms of those agreements.

One of these instances reportedly occurred on Dec. 18, 2014, when Salls had $318.17 in her checking account and had made a debit card purchase on Amazon.com for $36.18 and had left her with a positive balance of $311.55.

Even though Salls had more than enough money in her account to cover the purchase, she claims, DCU had still reportedly assessed a $30 “uncollected funds” fee.

A similar instance reportedly occurred on Dec. 19, 2014, when she had $281.55 in her checking account and had made a debit card purchase for $27.97 and had left $253.58 in her account. Once again, Salls says she was charged a $30 “uncollected funds” fee even though she had more than enough money in her checking account.

Salls argues that by charging these allegedly illegal overdraft fees, the credit union violated its own DCU overdraft protection policy. At least one of these alleged illegal overdraft fees occurred within the last twelve months, but several older incidents occurred in 2014, Salls claims.

According to Salls’ complaint, the DCU overdraft protection policy is a written contract with the consumer. She says the Account Agreement states that Digital Federal Credit Union will not charge any overdraft fees for any type of transaction, when the account has enough money to cover a purchase.

The Account Agreement allegedly states that customers could experience temporary holds that might take place on certain deposited funds before they are made available, but nowhere in the contract does it state that overdraft fees could result from these holds on funds designated for pending transactions.

According to the overdraft fees class action lawsuit, Salls states that Digital Federal Credit Union records will show that there were multiple instances as described above in which Salls had allegedly experienced illegal overdraft fees.

This Overdraft Fees Class Action Lawsuit is Salls v. Digital Federal Credit Union, Case 4:18-cv-11262-TSH, in the U.S. District Court of Massachusetts.