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Credit Unions Hit with Seven Overdraft Fraud Class Action Lawsuits
By Mike Holter
As more and more banks reach class action settlements in the massive overdraft fee litigation pending against 30 banks nationwide, seven credit unions were hit with their own overdraft fraud class action lawsuits last week.
Seven class action lawsuits were filed between June 21 and June 26 against SchoolsFirst Federal Credit Union, Star One Credit Union, Kern Schools Federal Credit Union, Educational Employees Credit Union, Alliant Credit Union, Alabama Telco Credit Union and America’s First Federal Credit Union alleging the credit unions charged improper overdraft fees.
Plaintiffs accuse the credit unions of deceptive business practices that involve “the systematic manipulation and re-ordering of electronic debit transactions from the highest dollar amount to the lowest dollar amount … to maximize the amount of overdraft fees collected.”
The credit union overdraft class action lawsuits also accuse the credit unions of publishing inaccurate and unreliable account balance information online, by phone and by ATM; delaying posting transactions; charging exorbitant overdraft fees’ failing to disclose overdraft practices’ and engaging in deceptive advertising campaigns.
The charges are nearly identical to those made in the case In re: Checking Account Overdraft Litigation pending against dozens of banks nationwide. Several banks have reached class action settlements in the case, including Bank of America ($410 million), JPMorgan Chase Bank ($110 million), Citizens Bank ($137.5 million) and PNC Bank ($90 million).
The credit union overdraft fee class action lawsuits are seeking damages for consumers for alleged fraud, negligent misrepresentation, unjust enrichment, breach of fiduciary duty and violation of the Unfair Business Practices Act and Professions Code. Conferences on the cases are scheduled for late August and early September if the parties fail to reach an early class action settlement.
Updated July 4th, 2012
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12 thoughts onCredit Unions Hit with Seven Overdraft Fraud Class Action Lawsuits
Bright Star Credit Union in Florida…opened secured credit card and secured loan. have had for several years. Credit Union released part of collateral allegedly by computer error, then came and STOLE FUNDS out of my account to recover collateral, never informed me, and charged overdraft fees on transactions AFTER THEY STOLE MY MONEY. I am a disabled army vet living on my disability check.
I discovered that I am not the only customer that this has happened
Does the computer do it for them? Is there some kind of screw the consumer software out there for banks. I’m sure there is, if they can get away with it, they’ll keep doing it,
Consumers credit union charges it’s overdraft fees based on available balance instead of actual balance. This has to be a form of double dipping. For example. An account has $72 in it. Three transactions become “pending”, one for $15 one for $50 and one for $20. Because the available balance is then negative, all three then cause overdrafts, even though there was more than enough in the account to cover any combination of 2 of them. The customer loses $90 for overdrafting one transaction.
EECU uses the check 21 rule when it is convenient for them too. I had $67 in my acct made two small purchase on a Friday well enough to cover, but becuase the merchant didn’t end their debit card batch till Monday, they took out a larger debit charge first. That one I don’t mind paying the fee for because it was entirely my fault. But the other two they took out after the big one & chaged me $30 each, I have my debit receipts for the dates that there was enough money to cover the 2 smaller transactions, There was a four day difference before the larger one was signed for. So supposedly its the merchants fault for not ending their batch…really?
I was charged over $400 when a deposti did not make it into my account and I had no idea and they kept on authorizing me to purchase. So freaking sick of banks and credit Unions. The Credit Union is IQ credit union in Vancouver Wahshinton.
Patelco Credit Union also does this frequently.
Central State Credit Union in Lodi, Stockton, San andreas is known to do this as well. Hoping someone will proceed to investigate them as well.
How can you join this class action
I think they all do that. The worst one by far I’ve ever enountered is U S Bank. They robbed me when I had an account with them years ago. I loved when it was Mercantile and even Firstar. Once they took over it was murder. One thing I can say is credit unions have a lower fee when they do hit your account. Thank God I don’t have those days anymore.#whenIwasakid
We left Wells Fargo after dealing with all of their silly fees. Now we are with a credit union that I swear rearranges the deposit times. I thought I was the only one. Thanks for the news letter. I’m not crazy after all.