Banks Accused of Charging Multiple NSF Fees on Single Transactions

More banks are being accused of using procedures and policies to charge NSF fees or insufficient funds fees that are in violation of consumer protection laws. Some banks have been accused of hitting consumers with multiple returned item fees for a single transaction.

A returned item fee or NSF fees are leveraged when a bank declines to pay a transaction because the account does not have enough money to cover the transaction.

Many customers are at risk for NSF fees if they choose not to opt in to the overdraft protection program. This means that when the consumer tries to charge the account or use a check, the the bank will decline to process the transaction and can charge the consumer directly with NSF fees.

NSF fees are usually charged once per declined transaction. According to some consumers, however, these NSF fees are being mishandled by the banks.

Consumers allege that these banks are attempting to process transactions multiple times each in order to recover several NSF fees. Every time that a transaction does not post to the account successfully, the bank allegedly adds another NSF fee against the consumer.

A recent lawsuit filed by a consumer over NSF fee says, for example, that Fifth Third Bank is responsible for engaging in this behavior on a regular basis. That NSF fees lawsuit says that the charging of multiple non-sufficient funds fees on the same transaction breaches the contract between the consumer and the bank.

The consumer who brought that action against Fifth Third Bank says that that financial institution regularly charges multiple $35 NSF fees on the same transactions, even though reasonable consumers understand that the same transaction could lead to only one NSF fee.

NSF fees can rack up quickly. Some consumers say that they have had the same charge for insurance, a credit card payment, a gym membership, or other transaction rejected over and over again, leading to multiple NSF fees.

Banks charge current account holders a return item fee of $30 or more when there are insufficient funds in the account to cover a single transaction.

This is different from overdraft protection, which enables banks to allow the draw on the account in exchange for the customer paying an overdraft fee. Insufficient funds fees involve the bank declining the transaction altogether and charging the customer a fee.

Many recent lawsuits involving NSF fees argue that this practice is unfair as well as deceptive. Very small electronic payments or several PayPal transactions can lead to hundreds of dollars in NSF fees by the time a consumer realizes what has happened.

Consumers now argue that banks should be prohibited from this excessive and arguably illegal charging of NSF fees on a singular transaction. These consumers believe that the banks should only be allowed to charge insufficient funds fees one time per transaction rather than allowing multiple fees and charges to stack up in one bank account based on one transaction.

Join a Free Returned Item Fee Class Action Lawsuit Investigation

If you were charged multiple returned item fees (also known as NSF fees or insufficient funds fees) on the same transaction by your bank, you may be entitled to compensation.

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