Two BECU class action lawsuits claim that the credit union wrongfully charges overdraft fees in misleading and unlawful ways.

In one overdraft lawsuit, plaintiffs Paul Barrera and Angela Bovo claim that when an account hits a BECU account with a sufficient balance, the credit union reportedly sequesters funds to cover the transaction and authorizes the transaction. Despite allegedly sequestering funds and authorizing transactions, BECU will later charge overdraft fees on these transactions, the plaintiffs claim.

This pending transaction practice is known as “Authorize Positive, Purportedly Settle Negative Transactions,” or APPSN. Barrera and Bovo argue that this practice is misleading, self-serving, and against account contract documents.

“There is no justification for these practices, other than to maximize BECU’s OD [overdraft] Fee revenue. APPSN Transactions only exist because intervening checking account transactions supposedly reduce an account balance,” the BECU class action lawsuit claims. “…BECU is free to protect its interests and either reject those intervening transactions or charge OD Fees on those intervening transactions—and it does the latter to the tune of millions of dollars each year. But BECU was not content with these millions in OD Fees. Instead, it sought millions more in OD Fees on these APPSN Transactions.”

BECU also faces a class action lawsuit in Washington state court. Plaintiff Steve Marical claims that the credit union charges consumers overdraft fees on one time debit card or ATM transactions without first getting consent from consumers. This practice allegedly violates banking regulations that require banks to get consumer consent and opt in before charging overdraft fees.

“BECU’s practice of charging overdraft fees to members who have not affirmatively opted‐in to its overdraft program constitutes a breach of its agreement with each member and constitutes an unfair and deceptive practice under Washington law,” Marical argues in his BECU class action lawsuit.

Boeing Employees Credit Union (BECU) offers overdraft protection services to consumers. According to the credit union’s website, they will charge a $25 overdraft fee if consumers opt into the service. However, this will allow consumers to overdraft their account and complete transactions.

The Trouble with Overdraft Fees

Overdraft fees are charged by financial institutions when they move money from another account into a checking account. These fees are a sort of convenience fee that compensates a bank or credit union for moving money. At the same time, these overdraft fees can hurt consumers.

Consumers must opt into overdraft protection programs to cover ATM and one-time debit card transactions.

Overdraft fees are different from non-sufficient fund (NSF) fees in that NSF fees are charged on certain transactions that are not covered. When an account has insufficient funds to cover transactions, the transactions are rejected and the bank charges consumers a fee. Banks and credit unions do not need special permission to charge NSF fees.

The BECU Federal Class Action Lawsuit is Barrera, et al. v. Boeing Employees Credit Union, Case No. 2:19-cv-01197-BAT, in the U.S. District Court for the Western District of Washington. The BECU State Class Action Lawsuit is Marical v. Boeing Employees Credit Union in the Superior Court of the State of Washington for King County.

If you were charged overdraft fees or NSF fees by your bank or credit union that you believe are improper for any reason, the attorneys who work with Top Class Actions are ready to investigate these fees on your behalf.

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This article is not legal advice. It is presented
for informational purposes only.