A recent unfair overdraft fees lawsuit filed by the Consumer Financial Protection Bureau against TCF National Bank has reached a settlement agreement of $30 million, resolving the claims.

According to the unfair overdraft fees lawsuit, the bank used deceptive marketing to sign customers up for overdraft programs and charge unfair overdraft fees. The CFPB alleged in January 2017 that the bank had tricked hundreds of thousands of customers into signing up for an overdraft program that could incur costly and unfair overdraft fees.

Under a 2010 federal rule, banks are prohibited from charging fees on ATM and debit card transactions unless the customer has first opted into an overdraft program. According to the unfair overdraft fees lawsuit, however, TCF Bank had purposely misrepresented its overdraft program as something necessary to sign up for when the customer opens an account.

The CFPB’s lawsuit notes that the overdraft program had become a central feature to the bank’s business model, with a heavy marketing campaign for the program and employee incentives. By 2014, around 66 percent of TCF’s customers had opted into the program—more than triple the amount of response at other banks at the time.

The settlement agreement does not involve TCF admitting to any liability or wrongdoing. The bank released a statement saying, “Even though we provided our customers with written disclosures about our overdraft service that fully complied with the law and regulations, there is a possibility that some customers may not have fully understood their options for participating in the service between 2010 and 2013.”

Unfair Overdraft Fees

Some banks and credit unions may be using deceptive practices and policies to charge their customers more through these overdraft programs.

When customers sign up for an account, they may not be told all the details of the program or its associated fees. Others may not be informed that they have the ability to opt out of the overdraft protection program. Another problem is that overdraft fees compound, meaning that a consumer may not be facing just one fee at a time, but many piled on top of each other.

Some consumers have reported that their overdraft fees are skewed by the bank deliberately reordering their transactions in order to charge the most in overdraft fees that they can. Customers generally expect that their transactions will be processed chronologically, in the order they are made. However, some consumers claim that their banks reorder customer’s transactions from highest to lowest rather than from first to last, which makes each transaction increasingly more likely to overdraw an account. This can mean that a large fee processed earlier can tip a customer to overdraw their account earlier, with even more transactions left to be charged an overdraft fee.

Filing a Lawsuit Over Unfair Overdraft Fees

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

The Unfair Overdraft Fees Lawsuit is Case No. 0:17-cv-00166-PAM-DTS, in the U.S. District Court for the District of Minnesota.