An investigation into rising bank overdraft fees suggests that consumers are getting gouged by big banks.

HSBC and Capital One have been the main subject of an investigation into big banks’ practice of charging consumers higher and higher overdraft fees. Many other banks may be participating in similar practices. Reports indicate that banks and credit unions have been raising overdraft fees on consumers, as well as the fees imposed on debit card balances, ATMs, and checks.

Data suggests that in recent years, fewer consumers have been overdrawing their accounts, and investigations allege that these institutions have been raising their bank overdraft fees to compensate for the loss incurred by their consumers having fewer overall overdrafts.

Consumers allege that some banks are also strategically processing their transactions out of order to capitalize on the potential of causing an overdraft to occur. In other cases, consumers have claimed that their banks allowed them to continue to overdraft their accounts as a method of racking up more fees.

In 2010, legislation was passed prohibiting financial institutions from charging consumers bank overdraft fees unless the consumer had affirmatively opted-in to an official overdraft coverage or overdraft protection program. In many cases, financial institutions are charging overdraft fees to consumers with no overdraft protection.

Financial institutions currently under investigation include:

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

So, even if you don’t bank with Capital One or HSBC, you may have legal recourse if you feel that your bank has unfairly charged you bank overdraft fees.

The “big three” banks, JP Morgan Chase, Wells Fargo, and Bank of America, reportedly made $6.4 billion dollars on bank overdraft fees last year. Large banks often have some of the highest overdraft fees in the industry. Financial institutions commonly argue that bank fees, including overdraft fees, are necessary for the institution’s operating cost. However, consumers and critics claim that the practice is just an easy way for banks to efficiently charge consumers more money and maximize their profits.

The average overdraft fee charged in the United States last year was $35. Roughly 83 million overdraft fees were charged to consumers last year alone despite regulations against charging consumers overdraft fees.

As a result of these allegations, the Consumer Financial Protection Bureau is investigating the problem. Though they may change the laws, those changes won’t make up for damages already done to consumers. So, many consumers are turning to class action lawsuits in the hopes of being compensated for financial injury.

Lawsuits that have been filed against financial institutions have taken aim against the organizations in a number of ways. Some lawsuits claim that the banks did not sufficiently disclose their fee structures to consumers. Others argue that the organization either intentionally or recklessly mismanaged a consumer’s money, causing the consumers to overdraft more than they otherwise would.

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