Bank Overdraft Fees
Under the law, a bank cannot charge overdraft fees on debit purchases or ATM withdrawals unless the consumer specifically agrees to overdraft protection. But some financial institutions are still allowed to charge when checks or certain recurring electronic payments overdraw an account, even when the customer didn't opt-in to overdraft protection.
Customers fought back and filed class action lawsuits against banks that manipulate how bank transactions are processed and thereby maximizing fee income. There are a number of ways that financial institutions charge consumers excessive and improper overdraft fees.
Your deposited check, for instance, may not get processed in a consistent time period, or possibly after you have been charged an overdraft fee. A day’s transactions may be re-ordered from chronological to size, so that the highest transaction is credited first, which will deplete your account more quickly and allow for the subsequent charging of individual fees on every following amount, no matter how small. It just takes one dollar in overdraft to incur fees up to $35. And about 80 percent of banks approve ATM and debit transactions that will cause an account to be overdrawn—even if the customer never asked their bank to provide overdraft protection, thinking if they didn’t have money in their account the purchase would be declined.
To give some idea of how pervasive these practices have become, the banking industry in 2017 made over $35 billion from its customers in fees alone, most of which came from overdraft fees. Around 18 percent of account holders pay three or more overdraft fees a year, and half of that group pays 10 or more fees a year, according to Time.com.
Four banks recently settled overdraft fees class action lawsuits for millions of dollars.
Bank of America and Uber Overdraft Fees Settlement
Bank of America has agreed to pay $22 million to settle a class action lawsuit that claimed it wrongfully charged overdraft fees on debit card transactions made with Uber. According to the Bank of America overdraft fees lawsuit, this conduct breached Bank of America’s account agreement with its customers.
Between 2012 and 2016, some Uber riders paying with a Bank of America debit card were charged extra when the ride-share company mistakenly said overdraft fees were recurring instead of one-time payments. In some cases, Bank of America didn’t pay its account holders back for the accidental charges.
Do You Qualify for Bank of America Cash Back?
If you qualify, according to the Bank of America, accountholders will receive a cash payment deposited directly to their account. Former Bank of American account holders will receive a check payment. The settlement payouts are dependent on the number of overdraft fees incurred by Class members—those class members who held a consumer bank account with Bank of America, and were charged (and not refunded) overdraft fees on debit card transactions made with Uber between Jan. 1, 2012 and Dec. 31, 2016 that were classified by Uber and/or Uber’s agents as recurring transactions.
JPMorgan Chase and Robocalling Overdraft Fees Settlement
The JPMorgan Chase settlement stems from claims that the bank was robocalling cell phones without getting permission. Tomeka Barrow and Anthony Diaz, lead plaintiffs in the class action lawsuit, allege that JPMorgan Chase violated the Telephone Consumer Protection Act by using a robocaller (auto-dialer) to contact hundreds of thousands of customers, in an effort to collect on mortgage and home equity line of credit accounts. Barrow claimed in the lawsuit that in June 2016, she "clearly and unequivocally" told a JPMorgan worker who called her that she only wanted to be contacted in writing. After that date, however, the bank robocalled her at least five times. The case is Barrow et al. v. JPMorgan Chase Bank NA, case number 1:16-cv-03577, in the U.S. District Court for the Northern District of Georgia.
Do You Qualify for JPMorgan Chase Cash Back?
If you got a call from the bank about collecting a debt between April 20, 2010, and March 16, 2018, you may get up to $101 per call. The deadline to file a claim is August 13, 2018. According to one attorney, class members would receive approximately $101 per claim in the settlement, based on anticipated claims rate of 5 percent. If 10 percent of the class members were to submit a valid claim, the estimated individual recovery would be approximately $50.68.
Wells Fargo Overdraft Fees Settlement
In its most recent settlement (and there are many) Wells Fargo has settled a class action lawsuit for $142 million over alleged opened accounts that consumers didn't know about. Apparently, many customers had to pay overdraft fees because of it. According to Reuters, the large fines would align with Trump’s public vow in December that Wells Fargo would face stiff penalties for charging fees to certain homebuyers to secure low mortgage rates. Trump said on Twitter that regulators would “make penalties severe” when companies are “caught cheating.”
Do You Qualify for Wells Fargo Cash Back?
If you were charged overdraft fees back in 2002, you could get part of this settlement. Wells Fargo claims no wrongdoing.
TCF Financial Overdraft Fees Settlement
TCF Financial has agreed to provide $25 million in restitution for the way the bank marketed and charged consumers for overdraft protection. These overdraft charges occurred from mid-2010 to 2013. At this time, TCF was implementing changes to Regulation E, which requires banks to obtain consent from consumers before charging overdraft fees on one-time debit purchases and ATM withdrawals, according to The Consumer Financial Protection Bureau (CFPB).
READ MORE EXCECESSIVE OVERDRAFT FEE LEGAL NEWS
Do You Qualify for TCF Financial Cash Back?
If you were charged overdraft fees between mid-2010 to 2013, you might be part of the $25 million restitution. TCF said it is currently working with the CFPB and the OCC to determine how it will be distributed to eligible current and former account holders. A restitution plan is set to be approved by the regulators in the fall with payments going out by the end of 2018, according to TCF.