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Consumers who have been assessed inappropriate NSF, or non-sufficient funds, fees by NBT Bank or another financial institution may be concerned that these fees will affect their credit score.
What Are NSF Fees?
Non-sufficient funds (NSF) fees are fees assessed by a bank or credit union against a customer when the customer writes a check or attempts to complete a transaction without having the appropriate amount of funds in their account. When this happens, the bank may deny the transaction and assess a fee of between $27 and $35 for attempting to overdraw the account.
Do NBT Bank NSF Fees Affect Your Credit?
While a bounced check or denied transaction resulting in an NSF fee may not be reported by your bank to credit bureaus, these actions may still affect your credit score. Debts or bills that are paid late due to bounced checks or NSF transactions may end up as late payments on your credit score.
Customers whose checks or transactions bounce when attempting to pay a debt including mortgage payments, student loan payments, or credit card bills may have these interactions reported to credit agencies. These bounced checks or payments will appear on your credit report as a late payment. However, if you pay the debt within a month of the original due date, the interaction will not negatively affect your credit score.
If you do not pay these debts on time, or if you bounce a check or transaction and do not pay back your bank, your bank may send these debts to a collection agency. At this point, these unpaid debts may be reported to the credit bureaus and damage your credit score.
Banks also have the discretion to report bounced checks to Chex Systems, a consumer reporting agency that helps banks to identify customers who may represent a financial risk. Although banks are not required to report bounced checks or NSF transactions to Chex Systems, they may decide to do so. If your bank does report these transactions, a negative mark will remain on your record for five years, possibly affecting your ability to open future accounts with other banks.
Additionally, consumers who repeatedly write checks that bounce may be refused by retailers who will not accept their checks. Many retailers use TeleCheck, a verification system used to determine whether a customer’s check is likely to bounce. If you are flagged as a risky customer with a history of bounced checks, retailers may decline to accept your checks.
What Other Ways Do NSF Fees Affect Consumers?
Customers at several banks and credit unions, including NBT Bank, have reported that these financial institutions are assessing improper NSF fees and causing consumers to overpay on NSF transactions and bounced checks.
According to consumer reports, financial institutions may be re-ordering their transaction history in order to charge the maximum amount of NSF or overdraft fees possible. Rather than processing these transactions in the order they were made, banks including NBT Bank allegedly rearrange these transactions from largest to smallest. This often results in multiple NSF fees for the same transaction.
There are ways for consumers to avoid the effects of these fees, but for those who believe they have been charged overdraft fees improperly, an attorney may be able to help.
How Does NBT Charge For Overdrafts?
Like many financial institutions, NBT Bank offers a range of services related to overdrafts. Though banks position these services as conveniences, they may do more harm than good. Unfortunately, whether you sign up for overdraft protection or not, you may be hit with fees if you overdraw your account.Â
Banks are not allowed to automatically enroll customers in overdraft protection, a service in which a bank lets a change process even if there is not enough money in an account to cover it. However, banks charge fees to let the charge go through. Because this service can cause consumers to incur extensive fees, customers have to opt into an overdraft program.
However, not opting into an overdraft plan is not a foolproof way to avoid fees at NBT Bank and other financial institutions. If you spend more money than what is in your account and you do not have overdraft protection, the charge will not go through, but you still may be charged an NSF fee nonetheless.
Banks may use a range of tactics to try to extract the maximum amount of profit out of an overdraft as possible. At NBT Bank, the bank may charge overdraft fees on some types of charges, even if you do not sign up for overdraft protection.
Additionally, the bank advertises a personal overdraft line of credit, which consumers can attach to a personal checking account. If a person charges too much to their checking account, funds will be transferred from the credit line to the checking account. However, customers who choose this option to avoid overdraft fees may be hit with interest fees on their credit line. In the end, customers who overdraft their accounts may be hit with fees like NSF fees, even if they take steps to avoid it.
Join a Free NSF Fee Class Action Lawsuit Investigation
You may qualify to join this NSF fee class action lawsuit investigation if you were unfairly charged NSF fees by one of these banks:
- Bancfirst
- Bell Bank
- Busey Bank
- Center Bank
- CenterState Bank
- Flagstar Bank
- Glacier Bank Wings Federal Credit Union
- Hudson Valley Credit Union
- Midwest One
- NBT Bank
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