Apple Federal Credit Union charges inappropriate overdraft fees, class action alleges

Credit union overdraft fees overview:

• Who: A Virginia business is suing Apple Federal Credit Union.
• Why: The company says the bank unlawfully charges overdraft fees on customer accounts.
• Where: The credit union overdraft fees class action lawsuit was filed in a Virginia federal court.

Apple Federal Credit Union has an unlawful business practice of assessing $29 overdraft fees on debit card transactions authorized on sufficient funds, a new class action lawsuit alleges.

Plaintiff Virginia Is For Movers LLC filed the class action lawsuit against Apple Federal Credit Union on April 28 in a Virginia federal court, alleging violations of state and federal consumer laws. 

According to the lawsuit, in 2021, the largest financial institutions in America charged customers almost $11 billion in overdraft fees. Customers who carried an average balance of less than $350 paid 84 percent of these fees. 

Because of this, industry leaders like Bank of America, Capital One, Wells Fargo, Alliant and Ally made plans to end the assessment of overdraft or non-sufficient funds (NSF) fees entirely, the lawsuit states.

Through the imposition of these fees, Apple Federal Credit Union has made substantial revenue to the tune of tens of millions of dollars, “seeking to turn its customers’ financial struggles into revenue,” the lawsuit alleges.

Apple illegally assesses overdraft fees on customers, lawsuit alleges

According to the lawsuit, the moment debit card transactions are authorized on an account with positive funds to cover the transaction, Apple Federal Credit Union immediately reduces consumers’ checking accounts for the amount of the purchase, sets aside funds in the checking account to cover that transaction and adjusts the consumer’s displayed “available balance” to reflect that subtracted amount. 

As a result, customers’ accounts will always have sufficient funds available to cover these transactions because the bank has already held the funds for payment.

“However, Defendant still assesses crippling Overdraft Fees on many of these transactions and misrepresents its practices in the Contract,” the lawsuit states.

The plaintiff seeks to represent all consumers who were assessed an overdraft fee on a debit card transaction that was authorized on sufficient funds and settled on negative funds in the same amount for which the debit card transaction was authorized. 

The plaintiff is suing for breach of contract, including breach of the duty of good faith and fair dealing, and violations of the Electronic Fund Transfers Act.

It seeks certification of the class action, an injunction, restitution of improper fees, damages, fees, costs and a jury trial.

Bank of America customers who use Zelle have recently hit both companies with a class action lawsuit, alleging they were unable to access their funds and saw their balances go into the red during a recent glitch. 

Consumers who were charged an overdraft or non-sufficient funds fee by certain financial institutions may qualify to join a class action lawsuit claim review. Click here for more information.

Have you had overdraft fees assessed on your Apple Federal Credit Union account? Let us know in the comments.

The plaintiff is represented by Devon J. Munro of Munro Byrd PC. 

The Apple Federal Credit Union class action lawsuit is Virginia Is For Movers LLC et al., v. Apple Federal Credit Union, et al., Case No. 1:23-cv-00576, in the U.S. District Court for the Eastern District of Virginia. 

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