Most banks have some form of overdraft protection available to their customers. But some banks have been accused of reordering transactions in order to charge customers more in overdraft fees.

One of these banks is Capital One. Capital One is the eighth largest commercial bank in the United States. It is based in Virginia, issues credit cards and is the fourth largest American bank auto lender.

In May 2015, Capital One agreed to pay a nearly $32 million settlement to resolve allegations of reordering transactions This reordering of transactions, customers say, led to customers being unfairly charged more overdraft fees than they would have been otherwise.

Customers claimed that Capital One changed the order of the posting of transactions into customers’ accounts. This change could have an effect on the amount of overdraft fees charged to an individual.

For example, instead of a bank posting transactions in the order that it receives them, a bank may choose to post them in the order of largest to smallest. If that is the case, and the bank account holder has a low balance, it is possible that if a larger transaction is posted first, that account may reach a zero balance quicker than the customer intended. This may also lead to a larger number of transactions posted as overdrafts.

Many banks have an overdraft fee per overdrawn transaction. If this is the case, a bank who reorders transactions may be charging customers an unfair amount for overdraft fees, whether intentional or unintentional.

Even though Capital One agreed to resolve allegations of reordering transactions for $32 million, Capital One has maintained that there was nothing wrong about the way it posted bank transactions. It also maintains that it never violated any laws. Capital One bank account holders who suspect that Capital One was reordering transactions posted to their account and had at least two overdraft fees also posted to their account were able to receive some of the settlement funds.

Capital One still charges a relatively high amount of fees per overdrawn transaction. An account is overdrawn when there is a negative amount of money in it, or when a bank customer has spent more money than is in his or her account.

When a bank account holder at Capital One overdraws his or her account, the bank may charge them a fee of $35 per transaction, depending on what overdraft policy applies. This can be done up to four times per day. So a small charge of, perhaps, a transaction at a coffee shop or a retail store could actually cost the consumer double, triple or quadruple the amount of the original transaction. This is especially true if a bank or credit union is reordering transactions.

It is vitally important that members of Capital One, or any bank, pay close attention to their accounts and fees. Banks and credit unions may charge customers unfairly by engaging in reordering transactions.

If you suspect a bank or credit union like Capital One has been reordering transactions and charging you fees unfairly, you may benefit from speaking with an experienced attorney.

ATTORNEY ADVERTISING

The choice of a lawyer is an important decision and should not be based solely on advertisements.