Banks and credit unions across the country feature overdraft protection programs in order to protect customers from being unable to make transactions when they overdraw their accounts. However, certain financial institutions like Meriwest Credit Union may be using practices that force customers to pay more money, like changing the order in which transactions post to the account so that more transactions get dinged with overdraft fees.

Alterations in the Meriwest transaction posting order can have serious financial effects on customers, forcing customers to pay more overdraft fees than they would have otherwise.

What is Overdraft Protection?

Overdraft protection is widely offered at banks and credit unions across the United States. These programs are meant to afford customers some cushion when they reach the bottom of their checking accounts, allowing them to make transactions even when they’ve overdrawn their account. For this allowance, customers are charged a set overdraft fee to cover the transfer of funds. Overdraft fees can in some cases be rather hefty, and customers may not even be adequately warned about how much overdraft fees may cost them in the future. But this is actually one of the less nefarious problems with overdraft protection.

Questionable Overdraft Practices

While many bank and credit union customers have undoubtedly found overdraft protection to be a useful program, banks rake in billions each year from their overdraft fee programs alone. Some of them use a variety of tactics to ensure this lucrative side industry continues to grow.

Indeed, on top of charging excessive fees, banks and credit unions may use deceptive practices to force customers into opting for the program in the first place and, once they’re signed up, into paying more overdraft fees.

When customers are initially signing up for an account with a bank or credit union, employees may either misrepresent the full scope of the overdraft program, fail to explain the details, or downplay the high overdraft fees. Customers may find that they are not even given a chance to opt out of overdraft protection, and they may not even know that this option is available.

Meriwest Transaction Posting Order

One particularly problematic overdraft practice that many customers do not know about is when banks and credit unions deliberately skew their customers’ transaction posting order.

Normally, banks process customer transactions chronologically, or the order in which they are made. This is the certainly what customers expect and, in some cases, count on. For a credit union like Meriwest, simply altering the Meriwest transaction posting order can lead to excessive overdraft charges.

The Meriwest transaction posting order may have been skewed so that transactions are processed from largest amount to smallest. This seems fairly innocuous—the same transactions are being made, just in a different order. No big deal, right?

Actually, those affected by a deceptive Meriwest transaction posting order may find that they are charged far more in overdraft fees than they would otherwise have been. This is because, if all of a customer’s larger debits post to the account first, the account will be drained to a zero balance sooner. Then more subsequent debits will qualify for an overdraft fee. And, since overdraft fees are not a one-time thing—each successive payment on an overdrawn account will occur its own overdraft fee—customers may be left with a much heftier overdraft cost than they ever expected.

Filing a Lawsuit Over Overdraft Protection Fees

Some customers who have been affected by deceptive practices have begun filing lawsuits against their banks and credit unions. If you have been subjected to unfair overdraft practices because of the Meriwest transaction posting order, other practices, or deceptive practices at another financial institution, you may be able to join a class action overdraft fees lawsuit.

ATTORNEY ADVERTISING

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