For one reason or another, many of us have run into a situation where we did not have enough money in our checking account to pay for a transaction.

Usually, it was not until later upon viewing our checking account statement that we realize we were charged an overdraft fee for this reason.

These overdraft protection programs typically cover payments on the behalf of a customer when there is not enough money in the checking account to cover a debit card transaction, ATM withdrawal, automatic bill payment, check or other item that needs to be paid.

[Read more: VyStar Credit Union May Be Misapplying Fees for Overdrafts]

Essentially, overdraft protection is a funds transfer or mini loan that the bank or credit union provides to a consumer to avoid having a transaction denied.

Most banks and credit unions offer some type of overdraft protection program to its customers, and VyStar Credit Union overdraft protection is no exception.

Financial institutions generally charge a fee for this service. Nationwide, the median overdraft fee charged to customers is $32, and these fees represent huge profits for financial institutions.

VyStar’s overdraft fee is at the median at $32 for its credit union customers.

Questionable Overdraft Fees Practices

Prior to 2009, financial institutions were able to automatically enroll consumers into overdraft protection programs. Now, banks and credit unions are limited in how they can enroll customers in overdraft protection by default.

One common questionable practice surrounding overdraft fees is the intentional reordering of transactions. Consumers assume that their transactions will be posted in the order in which they were made.

What some financial institutions have done has been to purposely reorder transactions from largest to smallest. In this way, banks and credit unions can allegedly manipulate the transactions to cause more overdrafts to happen, since the largest amounts were deducted from the checking account first.

Some financial institutions have even been the target of lawsuits and investigations over the allegedly improper reordering of transactions in order to maximize overdraft fees from customers, thus increasing company profits.

[Read more: Have You Been Hit with Unfair Overdraft Protection Fees? ]

VyStar Credit Union Overdraft Fees Practices

VyStar Credit Union is a Florida-based financial institution that serves twenty-two counties in Northeast to Central Florida.

VyStar Credit Union offers two types of overdraft protection programs. One VyStar Credit Union overdraft protection program allows customers to transfer money from their savings or money market account and have it deposited into the checking account to cover any would-be overdrafts.

The other overdraft protection offered from VyStar allows customers to transfer money from an unsecured line of credit into the checking account to pay transactions.

In its document for disclosures of VyStar Credit Union overdraft fees, VyStar reserves the right to order transactions in any order it chooses.

In the section covering the order of payments for overdrafts, the document states:

“Checks, drafts, transactions, and other items may not be processed in the order that you make them or in the order that we receive them. … [W]e may, at our discretion, pay a check, draft, transaction or other item, and execute other transactions on your account in any order we choose.

“The order in which we process checks, drafts, transactions, or other items, on your account may affect the total amount of overdraft fees that may affect the total amount of overdraft fees that may be charged to your account.”

Legal Investigation into VyStar Credit Union Overdraft Fee Practices

Practices such as those outlined in the VyStar Credit Union disclosure are currently under investigation by consumer advocates.

If you have been charged Vystar Credit Union overdraft fees that you think may be improper, you may be eligible to participate in this free legal investigation. An attorney can review your case at no charge and can help you understand your legal options.

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