Banks advertise overdraft protection — when a bank allows a customer to spend more money than they have in their account — as a service that provides peace of mind, while sparing them the hassle and humiliation of bouncing a check or having a transaction declined.

But overdraft fees can be confusing. When businesses continue to approve a consumer’s charges, the consumer may not be aware that he or she has overdrawn their account and may keep spending.

When it comes to overdraft fees, some banks may be charging too much or hitting the consumer with too many, while others may resort to misleading tactics to maximize the numbers of fees they can charge. Lawyers are investigating if this may be the case with a number of banks, including the Los Angeles-based City National Bank.

City National touts itself as a “full-service community bank,” offering  banking, trust, and investment services. It has a number of subsidiaries, including City National Rochdale, LLC; City National Securities, Inc.; First American Equipment Finance, and other affiliated companies. City National Bank merged with Royal Bank of Canada in November 2015. 

Like most large banks, City National advertises its online banking services as a convenience for its customers. 

However, Forbes reports that online banking may be part of the growing problem of overdraft fees. While online banking allows customers to transfer money, check balances, and perform other banking activities without stepping foot in a brick and mortar bank, online banking may not always have up-to-date balance information.

According to Forbes, because many pending transactions may take a while to post, the only way to get a truly accurate reflection of an account’s available funds is to balance a check book. To make the situation more confusing, some charges process faster than others or are processed in batches, so it’s difficult to anticipate when a charge will hit an account. 

Banks charge overdraft fees or fees for non-sufficient funds (NSF) when an account doesn’t have enough money to cover transactions. If a consumer does not know how much money is actually in their account because online banking is not accurate, banks make a high profit charging overdraft fees.

The confusion about account balances is a win for banks. However, the consumer is the one feeling the brunt of the fees, particularly those who live paycheck-to- paycheck and rely on the timing of transactions to ensure there are sufficient funds in their account to cover expenses.

Some lawmakers are attempting to limit the ways banks can charge overdraft fees, but the fees remain a staple of how banks make money. This is bad news for consumers, who can get charged overdraft fees by both banks and credit unions, says Nerd Wallet.  

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.