The lawsuit alleges, according to a report in Forbes (10/07/11), that Zions Bank had policies in place that allowed it to change the order of debit transactions, pushing accounts into overdraft and resulting in more overdraft fees being collected from customers. Furthermore, according to the lawsuit, the bank does not routinely decline debit transactions that can result in overdraft fees being collected. Perhaps most concerning to customers, however, are allegations about Zions Bank posting debits before deposits, pushing accounts that should not be overdrawn into overdraft and allowing fees to be collected.
The lawsuit was filed on behalf of Melinda Barlow and seeks class-action status. Barlow alleges she was charged $100 in overdraft fees on one day in 2009.
"As a result of those acts and practices, Zions Bank's customers have been charged excessive overdraft fees," the lawsuit states. "Zions Bank's collections of those excessive fees is patently unconscionable and unfair."
A spokesperson for Zions Bank said he could not comment on pending litigation. But this lawsuit is not the first to be brought against a bank alleging excessive overdraft fees. Recently, Wells Fargo & Co. was ordered to pay more than $200 million back to customers for "unfair and deceptive business practices." The judge in that case called the bank's defense that customers prefer big transactions to go through first because they are the most important, "utterly speculative," according to BusinessWeek (10/20/11).
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Lawsuits have also been filed against Bank of America, JPMorgan Chase & Co. and other banks alleging their policies allowed them to push customers into overdraft and ensure the banks would profit from overdraft fees. Banks reportedly charge up to $35 per overdraft transaction. Recent changes in legislation prevent banks from automatically signing customers up for overdraft protection, although some banks are accused of aggressively pursuing customers to convince them to sign up for overdraft.