Financial institutions like VyStar Credit Union are suspected of misapplying fees for overdrafts and misleading customers about how and when fees are charged. Unfortunately, VyStar may be among many financial institutions seeking to maximize the number of overdraft fees they can charge at their members’ expense.

An overdraft protection program is one in which a bank or a credit union allows a customer to spend more money than they have in their account. This is often advertised as a service that gives customers flexibility, but banks charge for this service.

On their website, VyStar Credit Union advertises its overdraft protection program as a convenience that gives customers the most flexibility possible with their money. The credit union offers two overdraft options: transferring money from a linked account, or advancing funds from a pre-approved line of credit.

VyStar promotes these options as “a great way to avoid embarrassment and fees.” However, programs like this can be riddled with fees, and may have more drawbacks than benefits.

Banks gain a large portion of their profits from fees for overdrafts. Many overdraft protection fees run as high as $35. According to Credit Union Times, lower fees can be very hard to come by, and at smaller institutions, overdraft fees reportedly tend to be higher.

These fees can be tricky, because financial institutions often do not tell customers that they have overdrafted their account before the customer initiates another transaction. So it can be easy for customers to continue to spend when their purchases go through, thinking that they have enough money in their account. Meanwhile, they could be racking up hundreds of dollars in fees for overdrafts, as each time they run their card, they may be charged another $35.

However, with the rise of mobile banking, it is easier than ever for customers to check their accounts, so fewer and fewer customers are over drafting their accounts.

In an effort to continue to maximize profits despite regulations around overdraft fees and customers’ reduced tendency to overdraft accounts, some financial institutions have been accused of implementing underhanded practices with their overdraft fees.
According to HuffPost, banking fees like those charged for overdrafts are a large strain on many working and middle class Americans, and can pose some very limiting restrictions. Many people find themselves trapped in a cycle, trying to pay off overdraft fees, and not having enough money in their account to avoid other fees. 

Because overdraft protection programs can cause such a financial hit, federal law restricts how banks and credit unions enroll customers in overdraft protection programs. For ATM transactions and one-time debit card transactions, banks and credit unions are not allowed to sign up customers for overdraft programs without their consent.
VyStar says on their website that customers are automatically enrolled in an overdraft protection program when they open a checking account unless the customer actively opt out to the program, requesting not to have the service on their VyStar checking account. It’s possible some customers may not realize that the default at VyStar is to be enrolled in an overdraft protection program, and they may be charged fees that they did not know they could incur. 

If you were charged unfair overdraft fees by your bank or credit union, you could be eligible to participate in a FREE class action lawsuit investigation. If you qualify, an attorney will contact you to discuss the details of your potential case at no charge to you.

Fill out the form on this page now for a free, immediate, and confidential case evaluation.

Learn More