Overdraft fees are seen as a bigger and bigger problem for banks and credit unions. A number of banks and credit unions have different ways of dealing with overdraft fees and providing customers with options.
Banks and credit unions typically give consumers three main “standard” overdraft options. First, banks may offer an overdraft protection, a service that draws money from a separate saving or checking account if a person accidentally goes into overdraft. But this option typically charges a fee.
Sometimes, customers can opt out of overdraft protection, having the bank stop the transaction in the first place and rejecting the purchase. But this may come with a separate insufficient funds fee, which might not look that different from an overdraft charge to the person on the receiving end.
Overdraft coverage is a more expensive way of dealing with overdraft, which basically works like a small short-term loan, and typically has a higher fee than other overdraft fees.
However, some overdraft programs may waive your fees under certain circumstances. For example, some banks and credit unions may waive overdraft fees if an overdraft is a small, pre-determined amount. However, if a person makes multiple small overdrafts before realizing it, overdraft fees could kick in.
Research Group Examines Overdraft Practices
Some banks and credit unions have their own ways of dealing with overdraft fees. For example, Capital One 360, an online bank, offers a form of overdraft coverage that has no opt-in fee, but instead has you pay interest on the amount the person has overdrawn, almost using the debit card as a temporary credit card for small amounts of money, in lieu of traditional overdraft fees.
A nonprofit think tank, the Pew Charitable Trusts has studied the issue. According to their estimates, people who opt in to overdraft protection actually pay about seven times as much in various fees as people who do not.
Additionally, the research group found that almost a half of banks and credit unions (44%) engage in a practice called transaction reordering, a process of selectively processing transactions to maximize overdraft fees.
For example, if a bank or credit union were engaging in this practice, they might hold a paycheck as long as they are legally allowed to, while processing purchases right away in order to trigger overdraft fees. Still, this practice is down from 2013, when 49% of banks surveyed engaged in this practice.
The Pew Group is pushing for tighter regulation from Washington, trying to discourage practices that allegedly gouge bank customers with overdraft fees by changing overdraft fee law.
In the meantime, it’s best to carefully research a bank or credit union’s overdraft fees to try and avoid paying more than one has to for overdraft fees.
Credit Union Overdraft Class Action Lawsuit Investigation
An overdraft class action lawsuit investigation has been launched to investigate the banking practices of a number of credit unions, including:
- Tinker Federal Credit Union, of Oklahoma City, Oklahoma
- Space Coast Credit Union of Melbourne, Florida
- Lake Michigan Credit Union of Grand Rapids, Michigan
- Eastman Credit Union, Kingsport, Tennessee
- Wright-Patt Credit Union of Fairborn, Ohio
This overdraft class action lawsuit investigation is looking for members of these credit unions who believe they have suffered from unfair or exorbitant overdraft fee practices.
Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual lawsuit or class action lawsuit is best for you. Hurry — statutes of limitations may apply.
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Join a Free Credit Union Overdraft Fee Class Action Lawsuit Investigation
If your credit union charged you overdraft fees, you may have a legal claim. Fill out the form on this page now to find out if you qualify!
An attorney will contact you if you qualify to discuss the details of your potential case.
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