Overdraft Fees Lawsuits | Bank & Credit Union Investigation
Banks and credit unions have a legal obligation to disclose any fees before they charge their clients for an overdraft. Clients have to opt-in and receive a proper explanation regarding these fees before they can be charged. Many financial institutions, however, have charged their clients without their consent.
Peiffer Wolf is currently investigating banks and credit unions for their overdraft fee practices. If you have not opted-in or your bank never disclosed the overdraft fees before charging you, you may deserve compensation. Contact Peiffer Wolf by filling out an online contact form or by calling 314-833-4827 for a FREE Consultation.
Overdraft Fees Lawsuits | Did your bank disclose its overdraft fees?
An overdraft, the Consumer Financial Protection Bureau states, “occurs when you don’t have enough money in your account to cover a transaction, but the bank pays the transaction anyway.” Since “you can overdraw your account through checks, ATM transactions, debit card purchases, automatic bill payments, and electronic or in-person withdrawals,” the financial institution “xpays the transaction and charges you a fee (in addition to requiring repayment of the overdraft amount). Overdrafts can also be covered through a transfer of funds from a linked account, credit card, or line of credit.”
However, the Federal Deposit Insurance Corporation stresses that “banks are required under Federal law to disclose any fees they charge in connection with a deposit account.” Moreover, “consumers must opt-in, or agree up front, that the bank can charge you an overdraft fee for any debit card transaction that overdraws the account. If you don’t opt-in, you can’t be charged a fee.” This rule prevents consumers from getting overwhelmed by these overdraft fees, since they can “add up quickly and can have ripple effects that are costly. Some banks also may charge what are known as continuous overdraft fees, or daily overdraft fees. These are charges assessed every day the account remains overdrawn.”
Peiffer Wolf’s investigation has revealed that banks and credit unions may have charged clients:
- for overdraft fees when the clients’ accounts still had money available;
- for overdraft fees for recurring payments,
- for multiple non-sufficient funds (NSF) fees in a single transaction;
- among other situations.
Peiffer Wolf is currently investigating banks and credit unions for their overdraft fee practices. If you have not opted-in or your bank never disclosed the overdraft fees before charging you, you may deserve compensation. Contact Peiffer Wolf by filling out an online contact form or by calling 314-833-4827 for a FREE Consultation.
Overdraft Fees | Know your rights
In 2009, the Federal Reserve announced rules for overdraft fees: “Institutions [are prohibited] from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts-in, to the overdraft service for those types of transactions.” Not only does the consumer need to opt-in, but also be “provided a notice that explains the financial institution’s overdraft services, including the fees associated with the service, and the consumer’s choices.” The final rule went into effect on July 1, 2010.
While states have specific regulations regarding overdraft fees, it is also important to know that a bill was introduced in 2021 and sent by the House to the Committee on Financial Services. As of October 2022, The Overdraft Protection Act is still being amended by the committee. HR 4277 aims to “amend the Truth in Lending Act to establish fair and transparent practices related to the marketing and provision of overdraft coverage programs at financial institutions, and for other purposes.”
FREE Consultation | 314-833-4827
Peiffer Wolf is currently investigating banks and credit unions for their overdraft fee practices. If you have not opted-in or your bank never disclosed the overdraft fees before charging you, you may deserve compensation. Contact Peiffer Wolf by filling out an online contact form or by calling 314-833-4827 for a FREE Consultation.
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