An overdraft fee class action lawsuit filed against a Wisconsin credit union in February 2017 has been brought to an end with a substantial settlement agreement.

According to the overdraft fee class action lawsuit, Landmark Credit Union hit the plaintiff and other customers with an unfair overdraft fee policy in violation of the Consumer Financial Protection Bureau’s regulations. The lawsuit alleged that Landmark wrongfully charged customers a total of more than $2 million in overdraft fees.

As part of the settlement agreement, which will go toward refunding customers some of these fees, the company has also agreed to change its overdraft practices in the future.

Overdraft Fee Class Action Lawsuit Specifics

The plaintiff, Danell Behrens, filed the overdraft fee class action lawsuit on behalf of herself and others in a similar situation. According to the lawsuit, Landmark Credit Union engaged in unfair overdraft practices that caused consumers to rack up charges, and even failed to allow customers to opt out of the overdraft program for certain transactions.

The overdraft fee class action lawsuit covers two groups of people. The first group consists of members of Landmark Credit Union who were hit with an overdraft fee between Feb. 9, 2011 and Feb. 28, 2017 while their ledger balance showed sufficient funds, even though their actual available balance wasn’t high enough to cover the transaction. The other group included in the overdraft fee class action lawsuit is members of Landmark who were charged overdraft fees because of ATM and debit card transactions between Feb. 9, 2016 and Feb. 28, 2017.

According to the overdraft fee class action lawsuit, Landmark did not allow its members to opt into its overdraft program for ATM and debit card transactions, and also improperly charged overdraft fees when there was a disparity between the ledger balances and the available funds in their checking accounts.

After being hit with the overdraft fee class action lawsuit, Landmark Credit Union agreed to settle. Landmark is set to create a settlement fund of $950,000, from which class members may be awarded based on the number of applicable overdraft payments they made. Behrens, as the named plaintiff, may be awarded as much as $10,000 for her role in the overdraft fee class action lawsuit.

Unlawful Overdraft Practices

Overdraft protection programs are now considered standard at banks and credit unions across the country, helping to prevent customers from being unable to make a transaction when they’ve hit the bottom of their account. Money is transferred to cover the transaction in exchange for an overdraft fee.

There are several ways a bank can incur excessive overdraft charges. Customers may never have been given the full details of the bank’s overdraft program when they originally signed up for their account, and others may not even be informed that they could opt out of the program in the first place and thus avoid overdraft fees altogether.

Some banks reportedly make a practice of deliberately reordering transactions to collect more in fees, from highest to lowest rather than chronologically, making each successive transaction increasingly more likely to overdraw the account, allowing the fees to compound.

Filing an Overdraft Fee Class Action Lawsuit

Several financial institutions are currently under investigation for deceptive overdraft protection policies, and some, like Landmark Credit Union, have been hit with an overdraft fee class action lawsuit in response.

If you have been affected by deceptive overdraft charges or practices from Landmark Credit Union or another financial institution, you may be able to file a lawsuit or join a class action lawsuit.

The Overdraft Fee Class Action Lawsuit is Behrens v. Landmark Credit Union, Case No. 3:17-cv-00101-jdp, in the U.S. District Court for the Western District of Wisconsin.

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