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Reportedly, some banks and other financial institutions, such as Valley National Bank, have been accused of charging multiple NSF fees for a single transaction, causing customers to rack up huge penalties that they may not be able to afford.
What Are NSF Fees?
NSF is the acronym for “non-sufficient funds.” NSF fees refer to the penalty a bank will charge a customer for overdrawing their account, also sometimes called “bouncing a check.” These fees can also be assessed on debit card transactions. Fees generally range from $27 to $35, but Valley National charges customers a $36 fee on its “Easy Checking” account for non-sufficient fund transactions.
Essentially, NSF fees are assessed when a consumer attempts to overdraw their account and the transaction doesn’t go through. Because of the risk of NSF fees, consumer should use caution when writing a check or setting up an auto payment for a subscription or service.
Different states have different caps on NSF fee costs, typically ranging from $20 to $40, though some are percentages of the transaction amount instead. For instance, many states cap their NSF fees at $20, $25, or $35, while Delaware and Mississippi cap their fees at $40, and others charge a percentage if the check amount exceeds a certain threshold.
How Can You Get an NSF Fee Refund?
Consumers report being slammed by NSF fees, with one fee quickly snowballing into multiple fees that are hard to control. According to a 2016 report by Pew Charitable Trusts, consumers have shouldered billions in bank fees, including NSF fees.
These fees and others have been lucrative for banks and other financial institutions, with the New York Times reporting that they raked in $11 billion in overdraft fees in 2019 alone.
NSF fees add up, so it is important to fight them if possible. According to Sapling, the first step to fighting a fee is to find out if the bank had the right to charge the fee in the first place. Banks often use “overdraft protection” programs to hit consumers with NSF fees. The programs are meant to curb the embarrassment of having a debit card declined; however, consumers need to opt in to overdraft protection programs in order to be charged the fee.
Next, it is important to review the account’s deposit history. An account holder who is sure they had sufficient funds may want to ensure that the bank didn’t make an error and credit the wrong account when they made their deposit.
Finally, Sapling recommends simply asking for the bank to remove the fee depending on the circumstances. If the bank agrees, the funds should be replaced within a few hours. However, it is important to note that any continued overdraft charges on the account may be subject to fees in the meantime.
How Are Overdraft Fees Different?
According to Next Gen Personal Finance, overdraft and NSF fees are very similar and consumers and banks treat them as such. The minor difference is that an overdraft fee is charged when the bank covers the difference between the amount in an account and a debit charged to it. Overdraft fees may also be called “Courtesy” fees, as a result.
An NSF fee refers to a fee assessed when an account holder writes a check or attempts to withdraw more than is in their account, notes Next Gen Personal Finance. In this situation, if the consumer has not opted into their bank’s overdraft protection program, the check is returned for insufficient funds and the bank assesses a fee.
The result of overdraft and NSF fees is the same. Consumers are hit with these fees when their account is low, making it harder for them to cover future expenses and potentially leading to further financial troubles and even more fees. As it stands, overdraft fees hit record highs in 2020.
How Are Banks Overcharging These Fees?
Valley National and other banks have reportedly been charging consumer multiple NSF fees on solo transactions.
According to one lawsuit, an institution repeatedly resubmitted one transaction against a plaintiff’s account that did not have sufficient funds to cover it. Each time the bank allegedly assessed an NSF fee. According to the plaintiff, he was not informed that his account would be charged multiple times for the same transaction.
In addition to reportedly charging multiple NSF fees, banks have also been known to reorder transactions to maximize the fees charged to an account. Despite repeated pleas from consumer advocacy groups, banks and other financial institutions are still reportedly assessing overdraft and NSF fees on customers under guise of “customer service.”
Can You File a Valley National Bank Lawsuit?
More and more consumers are coming forward with lawsuits against banks they allege have overcharged or unfairly charged NSF fees, and in some cases, litigation has resulted in financial institutions paying back millions of dollars in fees to their customers. In one recent such case, TD Bank agreed to pay $97 million in restitution to 1.42 million customers, as well as a $25 million civil penalty to settle allegations leveled by the Consumer Financial Protection Bureau.
A number of banks and credit unions are under investigation for their fee policies by attorneys, including:
- Valley National Bank
- Bethpage Federal Credit Union
- Wings Financial Credit Union
- Banner Bank
If you are a Valley National Bank customer and have experienced multiple NSF fees, you may be able to join a class action lawsuit investigation. Excessive NSF and other bank fees are unfair and often affect those who can least handle it financially. A class action lawsuit can help hold financial institutions who hit consumers with unfair fees responsible and obtain compensation for those affected.
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.
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