A New York man recently filed a class action Capital One overdraft lawsuit, alleging the financial institution charged unfair insufficient funds fees to his account. This plaintiff is filing the class action Capital One overdraft lawsuit on behalf of himself and others consumers who may have been affected by the banks alleged actions.

Lead plaintiff Chris Lashambae alleges he was charged unfair overdraft fees on multiple occasions when he used his debit card to pay for a Lyft ride.  According to Lashambae , his overdraft protection contract states that overdraft fees are only authorized for recurring debit transactions.

Lashambae alleges the bank’s deposit agreement promises Capital One will not assess overdraft fees for any one-time debit card transaction. Overdraft fees incur when the customer’s primary checking account becomes overdrawn, and the bank has to transfer money from a secondary account to cover a transaction.

Also known as insufficient fund fees, overdraft protection is supposed to help protect consumers from the embarrassment of public card decline. Overdraft fees are essentially small loans customers take out against the bank, which can be later paid back. Customers are advised to quickly pay back these fees, to prevent the fees from accumulating.

Banks and credit unions have been recently accused of abusing overdraft fees, to maximize on profitably at the customers’ expense. This is allegedly done by processing transactions out of order, by the dollar amount of the transaction rather than chronically, in order to deplete consumer accounts at a faster rate.

Overview of Class Action Capital One Overdraft Lawsuit

According to the class action Capital One overdraft lawsuit, Lashambae’s Lyft transactions occurred in April, May, and June of 2017.

Debit card transactions can either be considered recurring or one time, depending if the transactions occur on a regular basis. Lashambae says Capital One either knew or should have known that the Lyft rides were not a reoccurring transaction, and should not have imposed overdraft fees.

Aside from violating the terms of their own agreement, Lashambae alleges he never signed up for Capital One’s Overdraft Service and never consented to being charged overdraft fees. Each overdraft fee was $35, with Lashambae seeking compensation for these allegedly unfair fees.

While there are federal policies in place to help protect consumers against abusive overdraft protection practices, customers are still wary about the risk of overdraft fees. In August 2010, it became illegal for banks and credit unions to automatically sign customers up for overdraft protection.  This means a bank or credit union cannot charge overdraft fees unless the customer opts into the program.

Lashambae filed this class action Capital One overdraft lawsuit, after discovering there were other consumers who experienced overdraft fees in similar situations. More specifically, Lashambae and other class members allegedly incurred improper overdraft fees on one-time debit card transactions.

This class action Capital One Overdraft Lawsuit is Chris Lashambae v. Capital One Bank, Case No. 1:17-cv-06406-FB-VMS, in the U.S. District Court for the Eastern District of New York.

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