Joanna Szabo  |  November 17, 2022

Category: Fees

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Overdraft Protection is available for consumers

A growing number of bank and credit union customers are reporting issues with unfair or deceptive overdraft protection programs.

Dozens of credit unions, including State Employees’ Credit Union (SECU) of North Carolina, are currently being investigated for potentially deceptive or unfair overdraft protection programs, including unfair fees.

Overdraft protection programs are a common feature of financial institutions, and are meant to help customers out when they overdraw their account and would otherwise be unable to make the transaction.

But overdraft programs are not always used primarily to help out individual consumers, and may even take advantage of them to maximize company profit. Each year, banks and even credit unions bring in billions of dollars in overdraft fees. On top of steadily increasing overdraft fees, some financial institutions may even engage in deceptive practices.

Deceptive overdraft practices

According to reports, many banks and credit unions alike have been steadily raising the overdraft fees they charge. This may mean that some consumers are being charged unfairly high fees for overdrawing their account—even though overdraft protection is supposed to help them, not hurt them financially.

Some consumers are also reporting that their banks or credit unions are engaging in deceptive practices in an attempt to wring the most in fees that they can out of their customers.

Some bank customers may not be given all the necessary information about overdraft protection when they initially opt into the program, may not realize they have to opt in for coverage on debit card transaction coverage, or may not even know that they are allowed to opt out at all.

Some banks and credit unions may even purposely reorder transactions to their advantage in order to trigger extra charges against the customer’s account. For example, transactions processed from highest to lowest (instead of in the order that they are made) mean that each consecutive transaction is more likely to trigger an overdraft fee.

As reported in Forbes years ago, because overdraft fees compound, reordering in this manner can mean that a customer is hit with more overdraft fees than they would be otherwise. Since the article, this problem has continued and grown.

While anyone can overdraw their account and therefore be hit with overdraft fees, those who most severely experience the financial effects of unfair fees are generally the most vulnerable Americans.

The Consumer Financial Protection Bureau (CFPB) has been investigating overdraft fee practices, which could affect future regulation of bank and credit union policies. In October 2022, the White House announced new CFPB guidance that prohibits unfair fees on certain transactions, including those which were authorized with a positive balance but later result in an overdraft fees.

But for those who have already been affected by unfair fees, for whom the possibility of a change in regulations somewhere down the line isn’t particularly helpful, a class action lawsuit investigation has been launched, looking into dozens of credit unions that may have engaged in unfair overdraft practices.

Credit unions included in this investigation include State Employees Credit Union of North Carolina, Boeing Employees Credit Union, Summit Credit Union of Wisconsin, VyStar Credit Union, and many more. A full list of credit unions involved in this investigation can be found on our investigation page.

If you have been hit with unfair overdraft fees or have otherwise experienced deceptive overdraft protection practices at State Employees Credit Union or another credit union, you may be able to file a lawsuit and pursue compensation. Filing a lawsuit can help to compensate for any financial losses that may have occurred, as well as hold companies accountable for their actions.

If you were charged unfair overdraft fees by your bank or credit union, you could be eligible to participate in a FREE class action lawsuit investigation. If you qualify, an attorney will contact you to discuss the details of your potential case at no charge to you.

Fill out the form on this page now for a free, immediate, and confidential case evaluation.

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Get Help – It’s Free

Join a Free Bank Overdraft Fee Class Action Lawsuit Investigation

If your bank and credit union has engaged in deceptive overdraft fee practices, you may have a legal claim. Fill out the form on this page now to find out if you qualify!

An attorney will contact you if you qualify to discuss the details of your potential case.

PLEASE NOTE: If you want to participate in this investigation, it is imperative that you reply to the law firm if they call or email you. Failing to do so may result in you not getting signed up as a client or getting you dropped as a client.

In order to properly investigate overdraft fee claims, you may be required to disclose bank statements to overdraft fee attorneys. Please note that any such information will be kept private and confidential.

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