Rabobank Class Action Lawsuit Challenges Continued Overdraft Fees

Rabobank NA has been hit with a class action lawsuit challenging its assessment and collection of continued overdraft fees.

According to the Rabobank class action lawsuit, continued overdraft fees are imposed by some banks when a customer’s checking or savings account remains overdrawn for a certain period of time after the transaction that caused the account to become overdrawn.

Plaintiff Joe Villanueva says that Rabobank charges a daily $5 continued overdraft fee for up to 10 days that a checking account remains overdrawn.

“This charge is levied in addition to the $35.00 fee that is levied on the customer for each charge made against an overdrawn account, but Rabobank’s account disclosures never inform consumers that they will be charged both fees for an overdraft,” the Rabobank class action lawsuit says.

Villanueva says that reasonable customers do not understand that the bank imposes more than one overdraft fee for a transaction. “Imposing an additional fee for an already overdrawn balance is counterintuitive when there is not an additional transaction causing the balance to be overdrawn,” the Rabobank class action lawsuit alleges.

On Sept. 13, 2015, Villanueva says he overdrew funds from his Rabobank checking account and was assessed a $35 overdraft fee. On Sept. 19, 2015, Rabobank allegedly assessed a continued overdraft fee of $5 over four days, amounting to a total of $20 in continued overdraft fees.

He says he had a similar experience with the continued overdraft fees in March 2015.

Other major banks such as Bank of America and Wells Fargo, which also operate in California, do not charge two types of overdraft fees for the same overdraft event, according to the Rabobank overdraft fee class action lawsuit.

Villanueva says that, if Rabobank had provided him with accurate disclosures about its continued overdraft fee policies, he would have selected a bank that did not assess two types of overdraft fees for the same event.

The plaintiff claims that Rabobank assesses continued overdraft fees to increase its revenue on customer accounts that remain overdrawn for more than five days. These fees, however, can be especially problematic for low-income individuals and families.

The Rabobank class action lawsuit points to a survey conducted by The Pew Charitable Trusts, which found that nearly seven in 10 consumers with high rates of overdrawing their accounts make less than $50,000 each year. About a quarter of these consumers reportedly pay a week’s worth of their wages in overdraft fees annually.

By filing the Rabobank class action lawsuit, Villanueva seeks to represent himself and a proposed Class of all Rabobank checking accountholders in California who incurred one or more continued overdraft fees during the applicable statute of limitations period.

The Rabobank class action lawsuit assert claims for breach of contract and violation of California’s Unfair Competition Law. Villanueva seeks injunctive relief, restitution and/or equitable relief, prejudgment interest, attorneys’ fees and costs, and other relief the court deems just and proper.

Villanueva is represented by Jesse Hindman of Hindman APC and by Jeffrey D. Kaliel and Sophia Gold of Kaliel PLLC.

The Rabobank Overdraft Fees Class Action Lawsuit is Joe Villanueva v. Rabobank NA, et al., Case No. 37-2018-00028998-CU-BT-CTL, in the Superior Court of California, County of San Diego.