To that end, a lawsuit initiated in Connecticut asserts, amongst other allegations, that People’s United Bank charges overdraft fees even when account holders have sufficient funds in an account to cover all transactions.
The People’s United Bank excessive overdraft fees class action lawsuit was filed in Connecticut by plaintiff Teriann Walker. Among other allegations, Walker asserts that People’s United fails to adequately explain, define and outline its overdraft protection services in various ‘opt-in’ contracts – or define specific methods employed to calculate those fees.
Banks have been known to alter the order of transactions from that of the actual chronological order of debits carried out by account holders. Consumers may have carried out certain transactions, in a specific order and with specific dollar amounts with the view to avoid overdrawing the account and incurring fees. However, there is no guarantee a bank will abide by, and follow the transaction order when facilitating the debits. This re-ordering, either calculated or in random fashion, can succeed in putting an account into overdraft in deference to the original expectations of the account holder.
Walker’s People’s United Bank class action lawsuit appears to push those allegations into new territory: “Nowhere in the Account Agreement…does the contract anywhere states [sic] that for purposes of an overdraft fee that [People’s United Bank] would deduct from the funds in the account holds for pending debit card transactions,” the lawsuit states, “or that pending debit card transactions will be subtracted from the balance to create a lower artificial balance different than the real balance for purposes of assessing an overdraft fee.”
Various banks have indicated protocols that range from processing from the highest to the lowest amount (or vice versa), or by check number. Some advocates have maintained that processing by transaction order – in other words, reflecting the chronological order that the consumer had made the transactions and thus would expect the transactions to be processed in kind, remains the fairest system for the consumer. Account holders may undertake their transactions in a certain order with an eye on their account balance. Provided the account is debited in the same order, it would be expected the account would not go into overdraft and thus would not be dinged for overdraft fees.
However, observers note that most banks do not process transactions in chronological order, putting the consumer at a disadvantage.
People’s United Bank maintains its headquarters in Bridgeport, Connecticut. The People’s United Bank class action lawsuit brought by Walker was filed February 21 of this year. The case is Walker v. People’s United Bank et al., Case No. 3:2017-cv-00304 in Connecticut District Court, for the Second Circuit.