Attorneys Investigating Check Re-presentment Lawsuits

New York, NYIf you have a checking account that doesn’t tend to carry a lot of money, you may have noticed some fees charged to the account that you did not authorize. Take a closer look and you may discover you’ve been charged for check re-presentment. Check re-presentment occurs when a declined check is sent to a third party and that party then re-presents the check to have it processed once there is enough money to cover the check. The problem is that the third party isn’t known to the check writer, and may be going into the check writer’s account to withdraw fees that were not authorized.

Here's how it works: let’s say you make a $100 purchase and pay with a check. You only have $90 in your account, so the check is declined as NSF. Normally, your check would be sent back to your bank, you would be charged an NSF fee and you would have to make arrangements to cover the $100 purchase. With check re-presentment, when your $100 check is declined, it gets sent to a third party (a check recovery firm). That third party then re-presents the check at various intervals so that the check can be processed when you have enough money in your account to cover the $100.

In theory, it sounds good. After all, you don’t know your check was NSF and you’re not responsible for following up with payment. But the third party might be going into your account and withdrawing a re-presentment fee without your authorization. That fee could be anywhere from $20 to $60. You don’t have a legal relationship with the recovery party and have not given any permission to withdraw funds from your account, but they may still be charging you for a service you didn’t know you were using.

Signs that your account might have paid fees to a re-presentment company include seeing unfamiliar electronic checks, fees you don’t recognize or money paid to companies you’re not familiar with.

One class-action lawsuit has already been settled for around $1.8 million. That lawsuit involved a plaintiff, Ruth Muzuco, who had written a check to her real estate lawyer for around $1,000. The check was declined and was subject to check re-presentment through a company callsed Re$ubmitIt. Muzuco was allegedly charged $50 for the re-presentment without her consent. In this case, Muzuco’s bank and Re$ubmitIt allegedly shared the $50 fee, which was labeled an NSF Fee Check. According to court documents, the settlement resulted in each class member recovering 100 percent of their out-of-pocket damages.

Attorneys are now in the early stages of investigating more lawsuits against companies involved in check re-presentment.

The Muzuco lawsuit is Muzuco v. Re$ubmitIt, LLC, et al., Case Number 11-cv-62628, US District Court, Southern District of Florida.