Many consumers have been getting hit with huge overdraft fees from banks and credit unions like Washington Federal Bank.

While many consumers may have initially signed up for the low banking fees associated with their banking institutions, recently overdraft fees are on the rise.

What is an Overdraft Fee?

An overdraft fee is charged by a bank when a customer withdraws more money from their account than the account actually holds. Consumers who have bank accounts with overdraft protection will still be permitted to complete the transaction and the bank will temporarily cover the remaining costs.

The convenience of this service can cost consumers a significant amount of money. The fees associated with overdraft protection can vary by banking institution and are generally incurred each time the service is used. Overdraft fees can be called several names including insufficient funds fees, courtesy pay fees, or something similar.

In 2010, the federal government enacted laws that prohibit financial institutions from charging consumers overdraft fees unless the banking customer affirmatively opts-in to the overdraft protection coverage.

Due to complaints of excessive overdraft fees, the federal government has continued to review banking overdraft fee practices and may eventually release additional regulations.

Washington Federal Bank Overdraft Fees

Washington Federal Bank is one of many banking institutions that class action lawsuit attorneys are investigating to bring potential excessive overdraft fees class action lawsuits against.  A customer banking with Washington Federal Bank who uses the overdraft fee protection is charged $5 each time the services is required.

The $5 overdraft fee is incurred each time the customer spends more money than is available in their account regardless of how much they overdraw.  This can be incredibly costly for the consumer especially if they only overdraw their account by a few dollars.

Excessive Overdraft Fee Class Action Lawsuits

Washington Federal Bank is not the only bank that consumer protection attorneys are investigating to bring overdraft fee lawsuits against.  Other credit unions and banks that attorneys are investigating include Star One Credit Union, Nordstrom Bank, Boeing Employees Credit Union, and Patelco Credit Union.

Potential allegations against the banks and credit unions suggest that the banks failed to disclose fee structures, mismanaged funds, and participated in other improper financial practices.

In some cases, the financial institutions are accused of rearranging the order in which they process transactions in order maximize the the amount of overdraft fees a customer incurs.

Since overdraft fees are incurred with every transaction that exceeds the account limit, profits are maximized by processing the most expensive transactions first, so that more of the charges go over the account limit.

Consumers who have incurred overdraft fees may be able to join the excessive overdraft fee class action lawsuit.  Class action lawsuits are a means for people who share similar injuries (financial, physical, or otherwise) to come together against a defendant in order to spread the costs of litigation among all the members.

Class action lawsuits are a great way to hold defendants accountable for their actions when it wouldn’t be economical for a single individual to bring a lawsuit on his or her own.

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