New reports show that consumers paid $34.4 billion in overdraft fees and overdraft protection fees, the highest reported level since 2009.
According to the New York Post, overdraft protection fees have reached their highest level since 2009, at the end of the great recession, with consumers paying $34.3 billion in overdraft and overdraft protection fees during 2017.
Despite the dramatic increase, more consumers aren’t actually overdrawing their accounts. The rise in overdraft protection fee revenue was allegedly caused by credit unions and banks increasing their overdraft fees. Overdraft protection fees have risen from $20 in 2000 to $30 in 2017 at banks and from $15 in 2000 to $29 in 2017 at credit unions.
Overdraft protection fees comprise a significant portion of a bank or credit union’s yearly income, and many financial institutions have raised their rates in attempt to maintain a profit.
There is no legislation or regulation regarding how much money can be charged for overdraft protection charges. This means that customers who opt into the program could still pay up to $35 for transactions that take them even $5 into overdraft.
Reportedly, poor Americans are getting hit the most by this increase, causing serious financial burden and accruing around $450 in overdraft protection fees each year. “Consumers living on the edge can find themselves racking up numerous overdraft charges,”
Consumer Financial Protection Bureau director Richard Cordray said. “Despite recent regulatory and industry changes, consumers with low account balances and little margin for error continue to pay significant overdraft fees.”
As of Aug. 15, 2010, financial institutions are prohibited from charging overdraft protection fees to customers unless they have opted-in to an overdraft protection program. However, banks and credit unions are still allowed to charge when checks or recurring electronic payments overdraw an account.
The Consumer Financial Protection Bureau and Federal Reserve have been attempting to curb the issue by requiring banks to get customer permission before issuing an overdraft protection fee and not allowing overdraft protection fees to be charged to consumers who haven’t opted-in to a program.
Other consumers report banks purposefully processing their transactions out of order to maximize overdraft protection fees. These banks will allegedly process a group of pending transactions highest to lowest, with credits to an account being processed last.
This can reportedly cause consumers to accrue overdraft fees when their accounts should have sufficient funds. Banks have also been accused of allowing consumers to repeatedly overdraw their accounts regardless of insufficient funds, accruing additional overdraft protection fees.
Although government organizations are trying to establish regulation and legislation to protect consumers, many customers have already faced severe financial burden. Some consumers have resorted to legal action to recover compensation for unfair overdraft protection fees and deceptive practices.
Lawsuits against banks and credit unions address failure to disclose fees, mismanagement of funds, and other improper financial practices. In several cases, lawsuits against financial institutions have resulted in settlements.
If you or a loved one have been the victim of unnecessary overdraft protection fees or unfair business practices, you may qualify for an overdraft protection fees lawsuit.
Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. Some of the banks and credit unions being investigated include, but are not limited to:
- HSBC Bank
- UMB Bank
- State Employees Credit Union
- Pentagon Federal Credit Union
- Boeing Employees Credit Union
- Alliant Credit Union
- Star One Credit Union
- First Technology Federal Credit Union
- America First Credit Union
- American Airlines Federal Credit Union
- Alaska USA Federal Credit Union
- Vystar Credit Union
- Citizens Equity First Credit Union
- Teachers Federal Credit Union
- ESL Federal Credit Union
- Patelco Credit Union
- DFCU Financial Credit Union
The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual lawsuit or class action lawsuit is best for you. Hurry — statutes of limitations may apply.
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Join a Free Bank & Credit Union Overdraft Fee Class Action Lawsuit Investigation
If your bank and credit union has engaged in deceptive overdraft fee practices, you may have a legal claim. Fill out the form on this page now to find out if you qualify!
An attorney will contact you if you qualify to discuss the details of your potential case.
In order to properly investigate overdraft fee claims, you may be required to disclose bank statements to overdraft fee attorneys. Please note that any such information will be kept private and confidential.
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