For the last several years, financial institutions’ practices have been under the microscope, including UMB Bank unfair overdraft practices.

Back in 2012, UMB Bank settled a class action lawsuit alleging the bank systematically gouged customers.

At the time, UMB Bank sat accused of reordering customers’ transactions to ensure the best chance of the customers incurring overdraft fees due to insufficient funds.

For instance, if a balance of $100 was in the account, and a customer deposited $50 and then made a $125 purchase, he could see an overdraft fee if the purchase was posted on the account prior to the deposit.

The lawsuit alleged that UMB Bank purposefully placed debit card transactions in an order that allowed overdraft fees to be incurred even when there was enough money in the account to cover the purchases.

Anyone who paid an overdraft fee at a UMB Bank from 2005 through 2010 was considered to receive a cash payment from the settlement. UMB Bank admitted no wrongdoing.

UMB Bank Unfair Overdraft Practices

UMB Bank unfair overdraft practices might not be a thing of the past. The bank is under scrutiny again for its overdraft protection services. According to the company website, the following options exist:

• TotalCheck Overdraft Protection: There is a $10 fee for overdrafts over $5, and money is placed in the account to cover the amount of the overdraft. This transaction has an 18% fixed APR.
• Credit Card Overdraft Protection: The minimum advance increment taken from the credit card you have linked to your checking account will be $100. The fee is 3% of the advance for overdrafts greater than $5, with a minimum fee of $10 and a maximum fee of $25.
• Account-to-Account Transfer: If you have more than one account with UMB Bank, they will take money in $25 increments from one account and place it in the other account for a $10 fee for overdrafts over $5. This is the lowest possible overdraft fee available at UMB Bank.

Overdraft Protection Equals Overdraft Fees

Many financial institutions have copied prior UMB Bank unfair overdraft practices.

Consumers who have the least to lose are often the ones paying the most in overdraft fees.

A recent study by The Pew Charitable Trusts found that people who make less than the national median income of $54,000 a year are most impacted by overdraft fees.

“These people are likely to be living paycheck to paycheck to paycheck,” said Susan Weinstock, director of the consumer banking project at Pew.

Nearly 25 percent of heavy overdrafters paid the equivalent of a week’s worth of wages to such fees, according to the Pew report.

The Consumer Financial Protection Bureau states that the 628 largest financial institutions made $11 billion from overdraft and insufficient fund fees in 2015 alone.

If you have been a victim of a financial institution’s overdraft services similar to UMB Bank unfair overdraft practices, you could qualify for compensation through a class action lawsuit designed to hold the bank accountable.

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