Overdraft protection is often advertised as a service that lets customers have flexibility with and control over their money. However, it can be confusing and can lead customers to spend more money than they have, racking up fees on an overdraft in the process.

First Republic is a financial institution that offers private banking, private business banking, and wealth management services. They have locations primarily in California, Oregon, Wyoming, New York, Connecticut, Florida, and Massachusetts.

First Republic advertises “flexibility” as one of the many advantages of banking with their organization. Like many banks, First Republic also touts its mobile banking as a way to provide customers a convenient banking experience.

The bank notes that there is an overdraft protection service available that allows customers to link two accounts and transfer funds between them to avoid an overdraft. However, these transfers come with a fee themselves.

First Republic, like many banks, may charge customers an overdraft fee if they spend more money than is available in their account.

The Problem with Overdraft Fees

Lawyers are investigating if First Republic and other financial institutions may be charging too much in overdraft fees, or may be using misleading tactics to get customers to overdraft their accounts when they otherwise would not.

Credit Karma notes that many financial institutions are required to allow customers to opt in to overdraft protection programs as opposed to automatically enrolling them, to help customers have more control over what fees they may incur, but some banks may be finding ways to mislead customers and maximize their profits.

Fewer and fewer people are overdrafting their accounts, in part because they have access to online banking and can check their accounts wherever they are. This can help customers avoid making purchases that exceed the funds in their accounts.

On the other hand, banks make a large portion of their profits from fees like overdraft fees, says CNN.

Banks charge overdraft fees or NSF fees any time a customer tries to spend more than is in their account, so if a person does not know how much they truly have in their account because they relied on inaccurate information from their online banking, banks are able to make a high profit from these fees.

However, Forbes notes that online banking may be part of the growing problem of online fees. Reportedly, online banking may not be entirely accurate, and the abilities of the technology have yet to catch up with the demand.

According to Forbes, many banking professionals state that the only way to get a truly accurate reflection of your available funds is to balance a checkbook because many charges placed do not show up immediately online. However, many banks do not advertise this fact on their website, so customers believe that they can rely on their online banking to give them an accurate picture of their finances.

To make the situation more confusing, some charges process faster than others or are processed in batches, so it is hard to anticipate when a charge will hit an account.

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.