Some banks have been accused of unfairly charging an excessive overdraft protection fee, including situations in which transactions are reordered to maximize the fees.

Allegedly, these banks try to collect an overdraft protection fee on multiple transactions. When a customer overdraws the account,  the bank is able to charge a fee for drawing on a negative balance. For each individual transaction, if the customer has opted in to the overdraft protection fee program, the bank can levy a separate charge.

However, some consumers believe that Nationwide Bank and other institutions may have designed their overdraft protection fee plans to maximize their revenues at consumers’ expense.

A number of different financial institutions other than Nationwide Bank have been accused of charging an unreasonable amount in an overdraft protection fee. Consumer advocates are currently investigating practices at several of these institutions due to the number of complaints about an overdraft protection fee.

Federal law currently requires that banks obtain approval from customers who want to opt in to the overdraft protection fee program in the first place. Those who do not opt in will have charges that would draw their account into the negative declined entirely.

For those customers who choose to participate in the overdraft protection fee program, when the account dips into the negative at all, the bank can advance funds to cover the transaction and charge a fee for each such transaction. The customer is then responsible for bringing their account balance back to the black in addition to paying the fee.

However, some consumers say that banks are changing the transaction order in which the transactions are processed in order to collect a higher overdraft protection fee on each transaction.

According to the customers who make this claim, banks post transactions to their account in the order of largest to smallest, so that each subsequent transaction leads to a different fee. In the wake of more customers coming forward to lodge similar complaints with different banks, an investigation is looking into whether or not this scheme occurs at institutions across the country.

Although banks are within their rights and business practices to charge an overdraft protection fee, it must be done with the customer’s affirmative consent. Following the implementation of that law, consumers argue that dropping revenues from people who opted out of the overdraft program has led banks to explore other options.

According to these customers, banks are using tools like charging an overdraft protection fee on many transactions that wouldn’t have otherwise triggered a fee because of reordered transactions.

These consumers claim that the banks are doing this at the expense of customers and unfairly capturing fees. Some of these consumers want legislators to step in and stop this practice by establishing a law.

Since fewer consumers are opting in to such a program, banks might be struggling after collecting high overdraft fees for many years. Affected consumers claim that these companies are now looking for any and all ways to enhance their profits.

Several consumers harmed by their banks’ overdraft fee policies have been able to get compensation for themselves and other bank customers through an overdraft fees class action settlement. If you believe you were subject to improper overdraft fees by Nationwide Bank or another bank or credit union, you may qualify to join an overdraft fees class action investigation.

You may have a legal claim if your were charged excessive overdraft fees by one of these banks or credit unions:

• Alliant Credit Union
• Astoria Bank
• BECU (Boeing Employees Credit Union)
• Nationwide
• Pacific Western
• State Employees Federal Credit Union (SEFCU – New York)
• Sterling Bank
• Educational Employees Credit Union (California)

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