Suffolk Federal Credit Union Hit With NSF Fee Lawsuit

By Sage Datko | April 7, 2020

Category: Fees

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According to a recent lawsuit filed by a New York woman against her credit union, Suffolk Federal Credit Union may be charging customers inappropriate or predatory non-sufficient funds fees (NSF fees).

New York Credit Union Accused of Violating Its Own NSF Fee Policies

Plaintiff Felicia W. filed her lawsuit against Suffolk Federal Credit Union on March 24, 2020. According to her, she was required to agree to a contract when she became a customer with the credit union.

This contract between Suffolk Federal Credit Union and its customers allegedly states that if a customer’s account balance dips too low to cover the cost of a purchase, the credit union will assess a single $32 NSF fee per purchase. However, according to Felicia, the financial institution routinely violates its own policies by assessing multiple NSF fees for purchases.

Felicia claims that on June 17, 2019, she attempted to make a payment to American Express. However, as her account did not have enough money to cover the payment, the credit union rejected the transaction and charged her a $32 fee, per their policy.

While Felicia agrees that this first non-sufficient fund fee was appropriate, she claims that the next day, the credit union attempted to process the transaction again without her knowledge or authorization. This second attempt to process the payment also failed, and Felicia was assessed another $32 charge.

One day later, the credit union attempted to process the transaction for a third time, again without the knowledge or authorization of the customer, and Felicia was charged a third $32 fee. Despite the credit union’s policy of charging one NSF fee per rejected transaction, Felicia claims that she was charged $96 in fees for the same rejected payment.

Additionally, Felicia claims that this was not an isolated incident. According to her, the same pattern of re-trying rejected payments and assessing multiple NSF fees for the same initial transaction happened two other times between April and June 2019. These fees go against Suffolk Federal Credit Union’s own fee policies, which state that only a single fee will be assessed for each item that causes payment rejection.

About NSF Fees

Flagstar Bank says that it will only charge five overdraft or non-sufficient fund fees in a single day, but they may sometimes go back on these promises. NSF fees are fees that are charged against a customer’s account when the customer attempts to make a transaction and doesn’t have the proper amount of funds in their account to cover the cost. NSF fees are different from overdraft fees.

When a customer opts in to overdraft coverage, the bank will cover the cost of a purchase and add a fee if the customer attempts to make a transaction that costs more than they have the money for. NSF fees are applied when a transaction is rejected.

In these cases, the financial institution will deny the transaction and assess a fee. However, according to Felicia and other consumers, many financial institutions may be attempting to re-process the failed transaction several times after the initial rejection and charging a new NSF fee for each attempt.

Suffolk Federal Credit Union is not the only financial institution accused of assessing multiple NSF fees for rejected transactions. Other banks who may be engaging in unethical NSF fee practices include Bancfirst, Bell Bank, Busey Bank, CenterState Bank, Flagstar Bank, Glacier Bank, Wings Federal Credit Union, Midwest One, and NBT Bank.

As individual NSF fees generally range from $27 to $39, customers who are charged multiple NSF fees for a single rejected transaction may find themselves facing an unexpected and hefty bill.

If you have been charged multiple NSF fees for the same rejected transaction by your bank or credit union, you may qualify to hire an attorney and file a class action lawsuit regarding these predatory practices. Victims may be able to recover reimbursement and additional compensation.

Felicia’s Suffolk Federal Credit Union Lawsuit is Case No: 1:20-cv-01531, filed in the United States District Court for the Eastern District of New York.