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If you were charged more than one NSF (non-sufficient funds) bank fee for a transaction, you might wonder how many NSF fees a bank is allowed to charge.
While it’s not inherently illegal for banks to charge an NSF fee, consumers are crying foul when more than one NSF fee is charged on a single transaction.
If you have had the same electronic bill payment attempted and rejected by your bank multiple times, you could be incurring more than one NSF bank fee for that single transaction. At $30 or more per fee, your bank could be digging you into a deeper financial hole each time the transaction is attempted and there’s not enough money in your account, instigating the bank to reject the charge.
So how do NSF fees work? Essentially, an NSF fee is incurred each time a financial institution rejects a pending transaction and an electronic notification of the rejection is sent to the merchant who is expecting their money.
NSF bank fee lawsuits
Banks and credit unions have been defendants in lawsuits over allegations they charge unacceptable numbers of NSF fees for a single transaction.
In one NSF fee class action lawsuit, Digital Federal Credit Union was accused of having a “routine practice of charging two or three non-sufficient funds fees on a single transaction.”
Digital Federal Credit Union’s own documents allegedly indicate only one NSF fee would be charged no matter how many times the request for repayment was processed. If each request for repayment is considered a new, unique item, then the single NSF fee ends up equaling multiple fees for what is truly a single transaction.
In another lawsuit, USAA Federal Savings Bank was accused of breaching its contract to only charge one NSF fee for a single transaction. A woman alleged USAA charged her $29 three different times as a credit card payment was attempted multiple times.
Consumers allege banks are making extraordinary amounts of money by sometimes charging more for NSF fees than the initial amount of the intended transaction.
For example, one Bank of America customer said she was charged two NSF fees of $35 each before a transaction was covered, which also cost her an additional $35 overdraft fee. She lamented that one $20 payment towards a credit card cost her $115 total in NSF fees alone.
NSF fees are typically between $27 and $35, and are limited by a cap instituted by state law. Most states cap these fees at $20, $25, or $35, but some cap at $40 or even cap the fee at a percentage of the check amount.
On top of the risk of being unnecessarily penalized by getting hit with more than one NSF fee for the same transaction, these kinds of fees also hit the poorest American the hardest.
Banks were allowed to combine overdraft and NSF bank fee revenues into one category known as deposit service charges until 2015, according to the Consumer Financial Protection Bureau. At that time, the law changed, requiring overdraft fees and NSF fees to be tracked separately. The 2015 NSF fees totaled $11.16 billion in revenue for banks that had assets of more than $1 billion. That amount accounted for eight percent of the banks’ total net income.
The banks reported $3.87 trillion had been deposited in customer checking and savings accounts for the year ending Dec. 31, 2015.
How bank fees add up
In addition to an NSF fee, your bank also may charge you an overdraft fee. Together, the two fees could cost you $70 or more.
The overdraft fee is to cover the cost of the bank covering the money needed if your account does not have enough money in it to cover the amount of the bounced check. This overdraft protection is often around $35 per transaction, though it can skew a little lower or a little higher, depending on your financial institution or where you live.
Even if you have another savings account, line of credit, or credit card linked to your checking account in the event an overdraft occurs, the bank still may charge you a fee for the service of moving the money around from one place to another to cover the transaction amount.
The Center for Responsible Lending released a report on consumer bank fees assessed in 2019. In that report, the Center called the average overdraft fee of $35 as an “unreasonably high” figure because most customers who go into overdraft status usually do so because of a relatively small purchase amount of around $20. It’s hard for most consumers to see the justification of charging a customer $35 for the privilege of spending $20.
Research authors noted that 10 of the biggest banks in the United States collected more than $11 billion in consumer fees from their customers during 2019 alone.
In addition, the report indicates that nine percent of account holders pay approximately 84 percent of the overdraft-related bank fees, and the majority of these account holders only have an average of $350 in their account. There are a number of ways to avoid paying NSF fees, but the best way is of course to avoid incurring them in the first place.
Filing an NSF fee lawsuit
A growing number of people are filing lawsuits over NSF fees against their financial institutions, alleging the fees were unfair, excessive, or deceptive. If you have been hit with unfair or deceptive overdraft or NSF fees by your bank or credit union, you may be able to file a lawsuit and pursue compensation.
In many cases, a problem with unfair NSF fees can affect many more than one customer at a time due to issues with contractual promises the bank or credit union made to its customers as a whole.
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.
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
- Midwest One
- NBT Bank
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76 thoughts onHow many NSF fees can a bank charge on a single transaction?
I bank with High Peaks Federal Credit union, I made a deposit according to there own policy stating that deposits made that day would be used to cover checks I write, there deposit deadline is 6pm I made my deposit at 1pm they returned several checks because they said the were processed on a Sunday Nightand have been charging me overdraft fees every time the checks are resubmitted.
I talked directly with the CEO and he was very rude and unprofessional and they keep leaving detailed messages about my account on my voicemail, (personal info is never to be left on voicemail in violation of federal and state laws) they also talked about my account to people who are not on my account and do not work for the credit union.
I have filed a complaint against them with the NCUA but that probably will not do any good my next step is a civil law suit
I wish Chase was on here. I’m on disability and just got dinged for almost $400 in NSF fees for transactions that were under $10 and now it’s going to take me several months to get back to where I’m not in the negative with my account..
Because of all this I could possibly lose my apartment or electricity, phone service, vehicle and insurance. It’s taken almost a year to get back to before the apartment owner made us move out so she could do renovations, knowing that myself and the other resident had nowhere to go during that time. We had to reapply for our apartment just to move back in. It ended up costing us more and our rent increased almost $400 a month more after that. It’s a struggle just to keep basic things going and hope that no emergency comes up.
Add me wells Fargo charge me fees of $175 and $204 in less than a 4 week apart and when when made my transactions the money was taken right there when I used my card so why I’m I paying NSF they said because some merchant don’t charge the same day and I said that as nothing to do with me when it is taken from my account the day I swipe my card
Add me to the class action
sign me up.. I was with bb&t Bank and during the time the virus started and working retail as a meat cutter. the Bus stopped running in my area and uber was costing me one way 45 dollars to 4 dollars for a Bus round trip. there was items already paid by debt card and pending so when in a tuff time and know I was get paid the next day. they would already charge me the 35 over drafting fee plus charge me also for the 4 pending transaction of 140 on top of it. Just in the 6 months they charge me over 6000. dollars in fee that I tried app called cushion to try to get and said bb&t Bank doesn’t want to work with them
Add me to BB&T, now Truist. They have a BAD habit of moving your transactions around. When I purchase items, the retailer gets there money then because it’s off your account. By moving transactions around out of order, they can cause an NSF and Overdraft! Then they readd the ALREADY PURCHASED ITEM that was paid for, making you pay for the items twice. By them moving around transactions, they Overdrafted me and charged NSF, it almost tripled from $398 to over $600. Then they sent my name and joint owner names to Certegy Check Service Inc, which puts your name on a list to NOT/DENY you from writing checks on debited items!!!
Key bank is terrible
Essential federal credit union Baton Rouge LA has got me 3 x and another 2 x
Add me
This all happened yesterday on the 4th of January 2022.
I had 4 different accounts with Columbia bank, 2 Business Accounts for a construction company, one account for a real estate business and one personal account.
I was charged over $2,800 in fees one ONE business account and then they transferred funds into a negative account without notice so a $4,700 deposit I made on Monday turned into $347 by Tuesday afternoon before I could make a withdrawal.
In order to make their transfer to themselves, they canceled a check I had written and employee and paid themselves.
When they wouldn’t let me get the money out, which I desperately needed, I tried to transfer those funds out of the account they had just moved money into (which overdrafted the account but as far as I knew that wasn’t against the rules if you make a deposit into that account within a certain amount of time) and then into the an account they weren’t holding using Venmo, which worked, when I went to withdrawal they accused me of fraud and told me to see the manager who told me they would close all of my accounts in 15 days and freeze deposits and I was being kicked out of their bank over a one time thing after they had started holding my deposits for nearly 10 days and then charging me NSF fees on that account where they held my deposit.
They also allowed my other account to go up to $2,500 in the negative before stopping it and then charging a daily $5 overdraft fee. They also let blocked ACH transfers go through which further made the account negative and they charged more.
So after $2,800 in fees on one account, a transfer to take all my money. A deposit into a SEPARATE business account and a separate personal account were frozen and the accounts were closed over the events in a different LLC account.
What should I do? This seams pretty shady. I had been there for two years and they were great in the beginning but announced a merger with another regional bank 3 months ago and started going down the tubes.
Most of this would likely have been avoided if there were always sufficient funds available of course. But as a small construction business in the winter during Covid, that’s not always realistic.
Thank you
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