Summit Credit Union Faces Overdraft Fees Lawsuit Claiming Unlawful Charges

A man has filed an overdraft fees lawsuit against Summit Credit Union (SCU) accusing the Wisconsin based financial corporation of charging unlawful overdraft fees.

Plaintiff Matthew D. filed the overdraft fees lawsuit in Wisconsin federal court. The lawsuit was filed on March 9, 2018.

According to the overdraft fees lawsuit, Matthew files the complaint on behalf of himself and all those similarly situated.

Allegations against the company accuse them of violating federal law in the charging of overdraft fees. Matthew claims SCU would charge an overdraft fee when there were sufficient funds to cover the transaction.

According to the overdraft fees lawsuit, “SCU’s practice of charging overdraft fees, even when there is enough money in the account to cover a transaction presented for payment, is inconsistent with how SCU expressly describes the circumstances under which overdraft fees are assessed.”

Matthew states that he was harmed by SCU, as they would charge his account an overdraft fee when there was money available in the account to cover the charge. As a result, SCU is alleged to have breached its contract and violated Regulation E of the Electronic Fund Transfer Act.

According to the lawsuit, Regulation E of the Electronic Fund Transfer Act prohibits SCU from “assessing overdraft fees for automated teller machine (ATM) and non-recurring debit card transaction. SCU, however, conducted themselves in these practices.

Overview Overdraft Fee Violations

According to a Consumer Affairs report, many consumers do not benefit from a bank’s overdraft protection service, and even so they may be charged an overdraft fee when there are sufficient funds in the account. It’s been even noted, however, that many consumers do not know that they are not mandated to take part in a bank’s overdraft protection service.

Since 2010, when the overdraft protection law was passed, it required financial corporations to allow consumers the choice of enrolling or not taking part in a bank’s overdraft protection service. Before then, banks could simply automatically enroll customers into their programs.

An overdraft protection service allows customers the feature to have their transactions go through their accounts even though there may not be sufficient funds available. If a consumer is enrolled in overdraft protection and a transaction goes through without there being sufficient funds available, a bank may charge an overdraft protection charge around $35 or so for each transaction.

However, there have been significant criticisms surrounding overdraft protection services with allegations that the programs target those in low-income communities and those who live paycheck-to-paycheck.

In fact, according to a study by The Pew Charitable Trusts that evaluated how overdraft fee services are not meeting the need of most consumers, they found some jaw-dropping results.

Some of these have included that nearly 3 in 4 consumers do not understand that they can allow transactions to become declined and not have any charges added to their accounts; the understanding of consumers about overdraft protection is low, even with those who have had conversations about the service; and that 1 in 3 consumers treat overdraft protection as a kind of short-term loan as a way to borrow money.

The Overdraft Fees Lawsuit is Case No. 3:18-cv-00167, in the U.S. District Court for the Western District of Wisconsin.

Join a Free Extended Overdraft Fee Class Action Lawsuit Investigation

If you have a checking account at one of the banks listed below and you were hit with an extended overdrawn balance charge or extended overdraft fee, you may be entitled to compensation.

• Fifth Third Bank
• BOK Financial
• Bank of Hawaii
• First Hawaiian Bank
• Capital One
• Bank of America
• TD Bank
• Citizens Bank
• People’s United Bank

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