USAA Allegedly Charged NSF Return Item Fee Three Times on One Transaction

A woman says USAA Federal Savings Bank charged her an NSF return item fee three times by continually resubmitting the item for payment.

Plaintiff Elizabeth Eiess alleges USAA has breached its contract and violated consumer protection statutes by charging multiple non-sufficient fund (NSF) fees for a single transaction.

“As a matter of policy and practice, USAA has programmed its systems to charge two, three, or even more NSF Fees on the same electronic transactions, when those transactions are rejected for insufficient funds then re-submitted for payment over and over again,” alleges the NSF return item fee lawsuit.

Eiess alleges that USAA’s deposit agreement does not disclose the practice of charging multiple NSF fees, and in fact, the agreement says it will not undertake such a practice.

What is an NSF Return Item Fee?

When a financial institution rejects an attempted transaction because a checking account does not contain enough money to cover the transaction, it transmits an electronic notification to the merchant, alerting him that the transaction was not approved.

USAA charges a $29 NSF fee when such a transmission to a merchant is needed. Eiess alleges the NSF fee is pure profit because the bank pays virtually nothing to reject the transaction.

According to USAA’s Service Fee Schedule, the NSF fee “[a]pplies to checks and other withdrawals from your account that FSB returns without paying due to non-sufficient funds.” USAA Federal Savings Bank refers to itself as FSB in certain contracts.

According to the NSF item fees lawsuit, Eiess tried to make a $358.83 payment on a credit card on Oct. 30, 2018. USAA allegedly rejected the payment because of insufficient funds in the checking account. Eiess says she was charged a $29 NSF fee as a result.

On Nov. 2, 2018, she claims, the identical transaction was submitted for payment again. USAA again allegedly rejected the transaction due to insufficient funds, which resulted in Eiess being charged another $29 NSF fee. USAA allegedly referred to the Nov. 2 attempt as a “retry payment,” which Eiess argues indicated the bank knew the transaction was a repeat attempt of the same authorization for payment.

Five days later, on Nov. 7, 2018, the $358.83 credit card payment was submitted for payment again, and again USAA allegedly rejected the transaction because of insufficient funds and charged another $29 NSF fee.

USAA purportedly charged Eiess $87 in fees while attempting to process the single payment of $358.83.

The return item fee lawsuit alleges Eiess made no effort to resubmit the item. She says that according to the terms of the checking account agreement, the NSF fee will be assessed per item, and no mention is made that an item or check or other type of withdrawal is ever eligible to incur multiple NSF item charges.

Eiess also alleges that a transaction cannot become a new “item” every time it is rejected and resubmitted for payment, especially when the subsequent submissions were out of her control.

The NSF Return Item Fee Lawsuit is Eiess v. USAA Federal Savings Bank, Case No. 3:19-cv-00108, in the U.S. District Court for the Northern District of California, San Francisco Division.

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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