Digital Federal Credit Union is facing legal action for allegedly charging improper overdraft fees to their customers. This has garnered negative attention from their customers and spurred several of them to file legal action.

A woman from Massachusetts has recently filed an overdraft fees lawsuit, alleging she was charged improper overdraft fees and that these actions violated the credit union’s own overdraft policies.

Plaintiff Brandi S. alleges she was charged improper overdraft fees, even though there were sufficient funds in her account to cover the alleged overdraft transaction. She states Digital Federal Credit Union (DFCU) violated their own overdraft policies.

Brandi argues that like other overdraft protection plans, DFCU was only supposed to impose an overdraft fee when it was necessary to transfer money from a different account. Also called insufficient funds fees, overdraft fees may occur when the bank or credit union has to transfer money from a secondary account into the customer’s primary checking account.

This can occur if the consumer is making a purchase like groceries, but does not have enough money in their checking account to cover the cost. To prevent card decline and the inability to make the purchase, the bank or credit union automatically transfers the money from a secondary account if the bank or credit union authorizes the money transfer.

Consumers are typically charged between $25 to $35 per overdraft fee. Overdraft protection is supposed to be a useful service to protect consumers from the embarrassment of card decline and remind them that their accounts need more funds.

However, overdraft protection has allegedly evolved into an abusive tool that big banks and credit unions may use to charge improper overdraft fees. This was allegedly the case for Brandi, who claims she was charged improper overdraft fees when her account had sufficient funds.

Overview of Overdraft Fees Lawsuit

According to the improper overdraft fees lawsuit, Brandi made an Amazon purchase on Dec. 18, 2014 in the amount of $37.18 and had a positive account balance of $311.15. Even though Brandi had a positive account balance and more than enough money to cover the Amazon purchase, she was reportedly charged an improper overdraft fee of $30.

That wasn’t the only time, she claims. Brandi was reportedly charged an additional improper overdraft fee of $30 when she made a debit card purchase for $27.97 and had left $253.58 in her account on Dec. 19, 2014. Brandi complained about these alleged improper overdraft fees to DFCU, stating that she had sufficient funds in her account.

In addition, Brandi alleges her overall account balance was further reduced when the bank imposed these improper overdraft fees. The Consumer Finance Protection Bureau observed in a 2012 study that improper overdraft fees have become increasingly more common for consumers in the United States.

The study found that over 90 percent of consumers had experienced improper overdraft fees. Improper overdraft fees have become so problematic that the federal government had passed a measure in August 2010 which required banks and credit unions to get the consent of consumers before implementing overdraft protection.

Brandi states she did not sign up for overdraft protection, and should not have been charged these improper overdraft fees. Brandi’s class action overdraft fees lawsuit proposes two consumer Classes, with one group charged improper overdraft fees even though they had a positive account balance.

This Improper Overdraft Fees Lawsuit is Case No. 4:18-cv-11262-TSH, in the U.S. District Court of Massachusetts.