A Mississippi-based bank has been accused of improperly charging bank overdraft fees and charging multiple fees for a single transaction.

What is Overdraft Protection?

When a transaction is sent to a bank to be processed, but the account in question has a balance lower than the transaction amount, there are two possible outcomes. First, the bank could deny the charge and apply a non-sufficient funds (NSF) fee. The second option is overdraft protection.

Overdraft protection prevents transactions from causing the account balance to fall below zero by covering the cost of the transaction and charging an overdraft fee. The shortfall between the account balance and the transaction amount is covered by the bank.

It’s worth noting that to receive overdraft protection, whether through your bank or credit union, you need to opt-in to the program. Without opting-in, transactions in excess of the account balance will be denied and incur a non-sufficient funds fee.

Does Trustmark Bank Provide Overdraft Protection?

According to the Trustmark Bank “Deposit Agreement, Disclosures & Fees” booklet, transactions in excess of the account balance may be approved if the customer has agreed to overdraft protection or if the bank opts to cover the transaction, which is “in [the bank’s] discretion.”

Each transaction that causes an overdraft is subject to an overdraft fee of up to $36 per item, which the agreement defines as “checks, drafts, transfers, in-person withdrawals, withdrawals by ATM, ExpressCheck Debit Card, ACH, online banking or other electronic means, and other debits or withdrawals.”

How Does Trustmark Overdraft Work?

According to Trustmark Bank agreements, any transaction in excess of the account balance could be paid or denied by the bank, at its discretion, unless the account holder has agreed to overdraft protection. If the account is protected from overdrafts, the bank will complete transactions and covering any shortfalls. Once the account has been overdrawn, any subsequent deposits may be applied to the debt.

Should You Be Charged Trustmark Bank Overdraft Fees?

Whether or not you should be charged a Trustmark Bank overdraft fee depends on your particular situation. For instance, if you have an account with the bank and have agreed to overdraft protection, you may be subject to an overdraft fee if you rack up charges in excess of your account balance. If you have $100 in your account but want to make a $130 purchase, Trustmark will complete the transaction and charge a fee. Based on this information alone, this would be a proper application of the overdraft fee.

For an example of an improper application of this fee, again imagine you have an account balance of $100. You then make a $100 purchase, and that $100 is immediately set aside. Your account should show a balance of zero at this point, however, the transaction has not been processed. Next, you attempt to charge $30 despite an available balance of $0. If you agreed to overdraft protection, this transaction would be completed and you would incur an overdraft fee of $36, in addition to the $30 you now owe.

The lawsuit against the bank alleged that Trustmark would charge an additional overdraft fee of $36 when the original $100 transaction is completed. This second fee conflicts with the terms of Trustmark Bank’s account contract and may represent an unjust enrichment of the bank, according to the complaint.

How Do I Avoid Trustmark Overdraft Fees?

The easiest way to avoid overdraft fees from Trustmark Bank or other financial institutions is to opt-out of overdraft protection, according to NerdWallet. This will prohibit a bank from charging overdraft fees to cover accounts that would otherwise be overdrawn.

However, some consumers may find that the benefits of overdraft protection outweigh the stress of overdraft fees. In these cases, there are steps consumers can take to limit the number of fees they are charged.

Keeping an eye on account balances can help consumers make sure they don’t initiate transactions they can’t cover. Mobile banking, phone services, and even an ATM visit can help consumers monitor their balances.

Additionally, some banks offer balance alerts. These alerts are triggered by a certain balance – set by the consumer – so they are aware their account has dropped below their desired threshold. This can be an indicator for consumers to be careful with their spending.

If overdraft fees prove unavoidable, consumers can avoid additional fees by quickly transferring money into the account to correct a negative balance. By transferring money from savings or another account, consumers are likely to further overdraw their accounts. Quickly initiating these transfers can help meet the daily deadlines required to avoid fees.

Unfortunately, even if consumers do their best to avoid overdraft fees, they may be unable to protect themselves due to deceptive or unlawful overdraft practices from banks. In these cases, legal action may help refund consumers for wrongful fees.

Have Trustmark Overdraft Lawsuits Been Filed?

At least one Trustmark Bank class action lawsuit has been regarding the financial institution’s allegedly predatory fee policies. In December 2018, Cryesha M. and Chantal L. sued Trustmark Bank on behalf of themselves and others similarly situated.

According to the two Mississippi women, Trustmark habitually assessed multiple fees for individual ATM transactions. The women claimed that Trustmark charged two fees for every withdrawal that uses an out-of-network ATM, and three fees for any ATM withdrawals made on out-of-network machines. Additionally, the women claimed the bank may also have charged overdraft fees for transactions that did not actually overdraft the account.

Not only did Trustmark Bank allegedly assess multiple fees on a single transaction, the lawsuit also claimed that the bank may not have properly disclosed these fees before they are assessed. Consumer financial protection laws require ATM fees and other bank fees to be disclosed to consumers before charges are assessed.

The women claimed that there is no reason for charging multiple fees, other than to enrich Trustmark and bring in additional profit for the bank. Additionally, they claimed that the fees are a violation of the bank’s own contracts with customers. Overdraft fees and NSF fees bring in billions of dollars in profit for banks every year, which may potentially incentivize financial institutions to continue charging them even when they are deceptive or predatory.

As Trustmark Bank holds the largest share of bank deposits in Mississippi, in addition to serving customers in Texas, Tennessee, Florida, and Alabama, thousands of consumers may potentially have been affected by these excessive fees, the plaintiffs alleged.

The 2019 class action lawsuit sought restitution for all improper fees, a return of any “ill-gotten gains,” attorneys fees, and actual and compensatory damages for class members.

This Trustmark Bank Class Action Lawsuit was Cryesha McDonald et al. vs. Trustmark National Bank, Case No. 3:18-cv-00852-DPJ-FKB, filed in the United States District Court for the Southern District of Mississippi Northern Division.

Overdraft Fee Settlements

The Trustmark Bank overdraft fees lawsuit may settle outside court. The exact details will depend on the terms of the settlement agreement, but bank customers may be eligible to be refunded some of their overdraft fees.

Trustmark previously settled an overdraft fees class action lawsuit. In 2013, the bank agreed to pay $4 million to end litigation alleging that it “improperly assessed excessive overdraft and non-sufficient funds fees.”

According to the Jackson Free Press, a bank customer initiated the lawsuit in 2012, claiming that Trustmark allowed debit card transactions to proceed despite insufficient funds in customer accounts. The bank then allegedly assessed overdraft fees to affected customers. The 2012 class action lawsuit also accused Trustmark of reordering transactions in order to trigger overdraft fees. The bank purportedly earned $55 million from these fees in 2010.

Other banks have agreed to multi-million dollar settlements over unfair overdraft fee allegations. According to The Daily Research Correspondent, TD Bank paid $122 millionin a settlement with the Consumer Financial Protection Bureau (CFPB).

The CFPB’s complaint claimed that TD Bank failed to obtain permission from its customers before charging them overdraft fees. Reportedly, the activity occurred between 2014 and 2018 under the bank’s “optional” Debit Card Advance Program.  Under the terms of the settlement, $97 million of the total $122 million settlement is to go to TD Bank customers.

Join a Free Bank Overdraft Fee Class Action Lawsuit Investigation

If you were charged overdraft fees or NSF fees by your bank or credit union that you believe are improper for any reason, the attorneys who work with Top Class Actions are ready to investigate these fees on your behalf. Learn more by filling out the form on this page.

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This article is not legal advice. It is presented
for informational purposes only.