A class action overdraft lawsuit filed against Digital Federal Credit Union has resulted in a $1.8 million deal for affected customers.

Digital Federal Overdraft Lawsuit

Digital Federal Credit Union is the largest credit union in New England. According to a overdraft class action lawsuit filed against the financial institution in June 2018, Digital Federal may have assessed overdraft fees against customers who had an adequate amount of funds in their accounts.

Additionally, some consumers accused the credit union of purposefully instituting confusing overdraft policies in order to assess additional fees against consumers.

According to named plaintiff Brandi Salls, Digital Federal charged her overdraft fees when she overdrew the “available balance” in her account. However, according to Salls, she had the appropriate amount of money in her “ledger” or “actual balance.” The overdraft lawsuit claims that these terms are confusing for consumers and that the overdraft policy is misleading.

Although Digital Federal argued that its opt-in agreement for overdraft fees references the term “available balance,” the judge in the case ruled that the term was not something the credit union could assume customers would understand without having it explicitly defined.

Under the terms of the settlement between Digital Federal and the Class Members, the credit union will pay out $1.8 million to customers and will also change the way that overdraft fees are assessed for at least the next three years. Class Members who qualify for a percentage of the settlement should receive either a mailed check or a direct deposit to their Digital Federal account, without having to submit a claim.

What are Overdraft Fees?

Overdraft fees
are fees that are assessed by a bank or credit union against a consumer who attempts to make a purchase despite not having adequate funds in their account. However, according to many consumers, banks and credit unions may process transactions out of order to assess multiple overdraft charges for the same transaction, or may word their overdraft policies in vague and confusing ways.

While overdraft fees themselves are not unethical, many financial institutions may be assessing them in predatory or manipulative ways.

Who is Affected?

Overdraft fees may be assessed against any consumer who has opted into overdraft protection at a bank or credit union. However, according to one Pew study, 52 percent of consumers who have been assessed an overdraft fee do not remember opting in to overdraft coverage.

Additionally, according to Salls’s overdraft lawsuit, these fees often disproportionately affect young people, poor people, and minorities. Nearly 70 percent of consumers who pay over $100 a year in overdraft fees make less than $50,000.

Victims who believe they have been assessed unfair overdraft fees may be able to hire a qualified attorney and file a lawsuit against their bank or credit union to recover compensation.

Salls’s Digital Federal Overdraft Lawsuit is Case No: 4:18-cv-11262, in the U.S. District Court for the District of Massachusetts.

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.

Learn more by filling out the form on this page.

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