But then again, maybe not. In December, Online Legal Media senior writer Brenda Craig revealed a new report from the Pew Charitable Trusts that was released five days before Christmas. The snapshot is not pretty: in spite of record fines and settlements against banks and credit unions having been made to eat humble pie with one hand and write a fat check to plaintiffs with the other, Pew reports that Americans are still paying about $14 billion a year in overdraft fees they shouldn’t be paying.
Consumers, for the most part can opt out of such overdraft protection that serves as a cash cow for the banks. But most consumers are unaware that they can. And the banks aren’t about to tell them.
As most know, overdraft protection is an option that allows for a check to be cleared or a debit honored even though there are insufficient funds in the account to cover the transaction. Call it, insurance: the bank honors the check, the account holder is notified of the discrepancy to the account and the bank carries the overdraft until the account can be brought out of arrears – and an overdraft fee is charged in exchange for the bank having to do this.
What has incensed thousands, if not millions of consumers has been the habit of banks to re-order debits to a degree that makes an overdraft situation worse than it otherwise might, by altering the chronological order of debits by an account holder all-too aware of a dwindling balance and careful to make debits in such a way as to avoid an overdraft fee.
Instead, it has been oft alleged that banks re-order transactions to not only trigger an overdraft, but to also trigger multiple overdraft fees.
But consumers are fighting back. Farrell et al v. Bank of America, Case No. 16-492, in the US District Court, Southern District of California, was resolved in November of last year when the defendant agreed to a $66.6 million settlement, according to Reuters (11/02/17).
In May, 2013 Wells Fargo faced a $203 million charge for misleading customers and charging excessive bank fees. Five years later, Wells Fargo is still being made to face the music by way of assertions from Public Citizen, the respected consumer advocacy group, that the banking giant is attempting to impel arbitration clauses allegedly hidden in the fine print of bank and account contracts to settle such disputes, rather than allowing consumers to pursue their issues through the courts.
“We still don't know the full extent of Wells Fargo’s Enhanced Coverage Linking years-long campaign to steal from its customers while also deceiving the public and Congress,” said Lisa Gilbert, Vice President of Legislative Affairs at Public Citizen, in comments made August 24 of last year in Washington, DC. “After todays’ court arguments [made by Wells Fargo in the 11th Circuit Court of Appeals], we do know that we can’t hold our breath waiting for the mega-bank to do the right thing.
“Wells Fargo Enhanced Coverage Linking bilked millions of its customers out of billions of dollars through excessive overdraft fees, and thus far, they have largely avoided responsibility by forcing their customers into a rigged pro-corporate arbitration system and denying them the right to go to court.”
The National Consumer Law Center (NCLC) in Washington, DC recently filed an amicus brief in the case of Roberts v. Capital One Financial Corporation that alleged the bank misled customers when charging overdraft fees, writes OLM’s Brenda Craig.
READ MORE EXCECESSIVE OVERDRAFT FEE LEGAL NEWS
Last fall, a banking overdraft fees lawsuit was initiated against People’s United Bank. The lawsuit, filed in Connecticut, is proposed as a class action.
Walker v. People's United Bank et al., Case No. 3:2017-cv-00304, was filed in
Connecticut District Court, for the Second Circuit.