Is Bethpage Credit Union Overcharging on Overdraft Fees? 

Bethpage Credit Union is one of several financial institutions currently under investigation for potentially charging unfair, deceptive, or excessive bank overdraft fees.

What Is an Overdraft Fee?

Overdraft protection programs are offered at many banks and credit unions, purportedly to protect consumers from being unable to complete a transaction when they hit the bottom of their account—in exchange for a set overdraft fee. However, it’s worth nothing that banks make billions each year on overdraft fees—and indeed, made more than $34 billion in overdraft fees in just 2017, according to the LA Times.

Overdraft fees can vary in cost depending on which financial institution charged them, but they are typically just under or over $30. Several major banks charge $35 overdraft fees. One of the worst things about overdraft fees is that they can quickly compound as more transactions are made on an overdrawn account. Just a few transactions can push a person to owing more than $100 in overdraft fees.

Some financial institutions may cap the number of overdraft fees that can be charged in a single day, but others do not.

Overdraft fees cannot generally be charged unless a customer has willingly opted into an overdraft protection program. Otherwise, the transaction simply might not go through, or the customer might be hit with an non-suffiecient funds, or NSF, fee instead.

How Is an Overdraft Fee Different from an NSF Fee?

A non-sufficient fund (NSF) fee is another common bank charge. These are charged when a customer’s low balance causes a transaction via a check or a recurring transaction to be rejected. NSF fees are also known as returned item fees, and checks made on accounts with insufficient funds are more colloquially known as “bounced” checks. When these situations occur, banks can refuse to let the transaction go through, and then the customer gets hit with an NSF fee.

How Does Bethpage Credit Union Charge Overdraft Fees?

Bethpage Credit Union fees are charged when the account balance does not cover a transaction when it is made, but Bethpage authorizes the payment anyway. According to Bethpage’s policies, they weigh the transaction against the “available balance”—that is, the amount of money available for immediate use in the account.

Bethpage Credit Union Fees can be charged in a number of situations, such as if a check, ACH payment, or recurring debit transaction pushes an account into overdraft. Under Bethpage’s Courtesy Pay policy (which a customer can opt into), the credit union will cover everyday point of sale transactions that overdraw an account. An overdraft fee will be charged on most of these transactions, with a few exceptions. No fee will be assessed under the Courtesy Pay service if the overdraft purchase is $20 or less, or if the Total Balance in the account at the time of the transaction had enough to cover the payment, even if the Available Balance is actually overdrawn.

How Can I Avoid Overdraft Fees?

The easiest way to avoid overdraft fees is to opt out of any overdraft fee protection program. Unless you are enrolled in an overdraft protection program, your bank or credit union is not allowed to charge you overdraft fees.

However, a lack of overdraft protection could result in other fees such as NSF fees. Additionally, some consumers want to keep their overdraft protection in place in case they need to make an emergency transaction which would otherwise overdraft their account.

If you want to keep your overdraft protection in place, keeping an eye on your balances can be a good way to avoid transactions which would otherwise overdraft your account. With the rise of mobile banking, its easier than ever to check your bank balances on the go. Some banks and credit unions also offer services such as balance alerts which send you a text or other alert when your account drops below a certain threshold.

With these methods, you can be aware of how much your bank account has at any certain time. Using this knowledge, you can be careful to avoid unnecessary transactions which would put your account in the negative.

Unfortunately, consumers may still struggle with overdraft fees even after taking these steps. Some banks and credit unions may be using unfair tactics to charge added overdraft fees to consumers. Attorneys are looking into Bethpage credit union and other financial institutions for potential misdeeds – meaning that consumers may be entitled to file an overdraft fee lawsuit.

Has a Bethpage Credit Union Lawsuit Been Filed?

Bethpage, along with a few other banks and credit unions, are currently under investigation for their overdraft fee practices.

But Bethpage Credit Union has already been hit with a lawsuit over its allegedly unfair and excessive fees.

The lawsuit was filed by plaintiff Jo-Anne F., a resident of New York State. According to the lawsuit, Bethpage Credit Union wrongfully charged their customers overdraft fees in an “accounting gimmick,” meaning that they were assessed these fees in instances when they should not actually have been charged at all. The lawsuit alleges that Bethpage violated and circumvented laws in place that limit when institutions can charge overdraft fees.

The lawsuit was filed on Apr. 9, 2020 on multiple counts, including breach of contract, violation of the Electronic Fund Transfers Act (Regulation E), and negligence, among others.

Were You Charged Too Many Bethpage Credit Union Fees?

A growing number of consumers are coming forward with lawsuits against banks and credit unions alike over unfair, deceptive, and/or excessive overdraft fees. If you believe that you may have been charged too many Bethpage Credit Union fees, you may be able to join a class action lawsuit. Filing a lawsuit can help you regain compensation, as well as help hold financial institutions accountable for their practices and protect countless other consumers.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

The Bethpage Credit Union Overdraft Lawsuit is Case No. 11288489.1, in the U.S. District Court for the Eastern District of New York.