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Multiple investigations and lawsuits have been launched against financial institutions recently, regarding alleged NSF fee and returned item fee predatory practices.
Customers claim in several lawsuits and investigations that banking practices such as the non-sufficient funds fee (NSF fee), or returned item fee are being misused by banks.
These investigations are determining whether these fees are breaching contracts between financial institutions and consumers. At least one lawsuit filed in California against Fifth Third bank alleges that these fees are levied in bad faith. While banks are legally allowed to assess these fees, they’re accused of abusive practices such as assessing multiple fees for a single transaction.
What is an NSF or Returned Item Fee?
NSF fees and returned item fees are assessed when a customer attempts to make a purchase and does not have enough money in their account to cover the cost. When this happens, banks charge a returned item or NSF fee of $30 or more as well as rejecting the purchase. After this happens, banks will often try to issue the payment again in a few days. If the account is still lacking sufficient funds to cover the cost, the purchase will again be rejected, and another returned item fee will be assessed. This can happen over and over, causing small initial charges to turn into tens or hundreds of dollars in returned item fees.This may also happen when a customer writes a check for more money than they have. When the check is rejected, it is often called a “bounced check.”An NSF or returned fund fee is different from an overdraft fee. Overdraft fees are assessed by banks when a customer attempts to make a purchase without enough money in their account, and the bank allows the purchase but adds an additional fee for the lack of funds.
NSF or Returned Item Fee Investigations
Attorneys are investigating the legality of NSF fees and returned item fees. According to a California NSF fee lawsuit, one plaintiff claims that his $13 Uber ride was initially rejected by his bank and assessed a fee. Several days later, he claims that the bank attempted to process the fee again, and it was again rejected. Another fee was assessed. A week later, the bank processed the transaction and assessed yet another fee, totaling $111 in fees stemming from a $13 Uber ride. The plaintiff in this case stated that he was assessed multiple NSF fees regarding another transaction as well. This lawsuit claims that the bank’s multiple NSF fees violate California’s Unfair Competition Law, a law meant to prohibit unfair, deceptive, or fraudulent business practices. One Bank of America lawsuit filed in late 2018 alleges that the bank makes billions of dollars every year through deceptive repeat NSF fees. This lawsuit alleges that although the customer does not voluntarily initiate the re-submission of the transaction after the initial rejection, the bank treats every re-submission as a new transaction that may be subject to NSF or returned item fees. According to this lawsuit, Bank of America does not disclose this fee structure on their deposit agreement or online banking agreement.If you have been hit with a string of NSF or returned item fees stemming from the same original transaction, you may be eligible to join an NSF fee lawsuit or investigation for free.
Join a Free Returned Item Fee Class Action Lawsuit Investigation
If you were charged multiple returned item fees (also known as NSF fees or insufficient funds fees) on the same transaction by your bank, you may be entitled to compensation.
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3 thoughts onLawsuits Challenge Legality of Banks’ Returned Item Fee
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Please add me. Unfortunately, BofA loves to suck their customers dry, throwing them into the negative with excessive fees.