Banks Face Customers Angry About Overdraft Fees

September 20, 2011, 2:00PM. By Heidi Turner

Los Angeles, CAFor customers who are angry about being charged excessive bank overdraft fees, filing a lawsuit may be the best way to recover lost money. Some banks have already faced bank overdraft fees lawsuits, although there are still banks that allegedly profited off bank overdraft fees by reordering transactions but have not been subject to lawsuits.

Banks Face Customers Angry About Overdraft Fees

Banks Face Customers Angry About Overdraft Fees

A judge's recent decision in a lawsuit involving overdraft fees appears to have bolstered the case against banks, but it remains to be seen whether that decision will have a significant impact on pending lawsuits. The judge ruled that the banks cannot force customers into arbitration to settle a dispute, opening the door for customers to file lawsuits in cases where they are charged excessive fees. That decision can be appealed, however, so until a final decision is reached, it is not certain that the determination in this case will have an effect on upcoming lawsuits.

If an appeals court affirms this decision, it could have a substantial impact on lawsuits alleging excessive bank overdraft fees.

What is important for customers to know is that many banks have reportedly used transaction reordering to push customer accounts into overdraft more quickly than they should have been, providing banks the opportunity to profit off fees collected from overdraft transactions. And those fees reportedly added up to the tune of more than $30 billion last year.

Some banks have announced they are doing away with reordering transactions—a practice in which debits from an account are processed from highest amount to lowest, which can push an account into overdraft far more quickly than the customer realizes.

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READER COMMENTS

Posted by
mary ann anderson
on October 17, 2011

Another horrible story about overdraft fees. It is criminal except it is leagl!

Posted by
joby
on September 28, 2011

Sure they are reordering (and it is credit unions doing reordering also), banks are posting debits before credits once again, an old strategy that was illegal for decades. I used that law to get every $ of my fees back in the '70s in California and in Michigan by complaining to the bank commissioners in those states. There is no excuse for it. Some banks use the excuse if there is an ACH (any electronic withdrawel like auto pay) they have no control over what time it hits their bank. BS. They can place the ACH in pending status (Chase does, surprisingly enough). What banks are doing is floating our money which makes them huge profits, and charging us $34 fees on top of it. I suggest we all file en masse complaints to bank commissioners of every state and stop this nonsense at the state level. I assume the state governments can pull bank charters and not let them even practice here. Washington doesn't know what the hell it is doing, let's fight at the state level.

Posted by
C Johnston
on September 27, 2011

In addition to reordering (and it is credit unions doing reordering also), banks are posting debits before credits once again, an old strategy that was illegal for decades. I used that law to get every $ of my fees back in the '70s in California and in Michigan by complaining to the bank commissioners in those states. There is no excuse for it. Some banks use the excuse if there is an ACH (any electronic withdrawel like auto pay) they have no control over what time it hits their bank. BS. They can place the ACH in pending status (Chase does, surprisingly enough). What banks are doing is floating our money which makes them huge profits, and charging us $34 fees on top of it. I suggest we all file en masse complaints to bank commissioners of every state and stop this nonsense at the state level. I assume the state governments can pull bank charters and not let them even practice here. Washington doesn't know what the hell it is doing, let's fight at the state level.

Posted by
JAmes Collins
on September 27, 2011

Adding to this topic.....
Another way they are able to "stack" insufficient funds" charges, is by NOT deducting the "insufficient funds FEE" immediatly - when it happens.
The bank waits until the following business day, to impose the fee.
That allows you to make additional purchases - with money that will not be there. Therefore creating another 3 or 4 "insufficient funds fee's"
--------------------------------------------------------
During that "limbo" time, it you were to deposit a check, for lets say $100, via an ATM.
And immediatly withdraw the $100 - BLAM!!! another insufficient funds fee. Because your account will not indicate that your balance is actually -$35.00

Posted by
Lynn Timmins
on September 27, 2011

What the banks are doing now is charging you the overdraft fees and saying it is not their fault and you have to get the money back from the company that caused the overdraft. They have their ways of getting their money. Last month they took my rental check that had cleared and when an unauthorized payment came through and I said it was not an authorized payment and I wanted it sent back. They told me I had to wait until it cleared. I said since when? I can refuse payment on anything that I did not authorized. THey waited for four days then they had enough guts to clear that unauthorized payment, send my rental check back that was already cleared, charge me a return fee, plus then a over charge fee because of this payment, then a return fee on that one, and sent two more back. Then they refused to return those fee's because it was not their fault and I had to get the funds back from the company that caused it. It is unbelievable. That is how they are getting around this new law that they are getting sued by. It has been going on now since the laws have been changed.

Posted by
Anita Sharp
on September 25, 2011

not fair give to the rich and take from the poor guess what can't take it with you when you go!!!!!!!!!!!!!!

Posted by
Cheryl
on September 25, 2011

I never know what fees are allowable and what fees are not allowable from the banks. They change every week.

Posted by
Sandra Frisbie
on September 25, 2011

My bank allowed a company off of the internet keep trying to draft money, even after I complained. Because the bank kept adding the amount they did not pay the internet people (never came out of account) except I owe bunches of money to them( Bank)

Posted by
Mr. Jones
on September 25, 2011

Paypal decided to charge my bank for two transactions, when I was sure Paypal was not set to charge my bank, as I have Paypals buyer credit. After paying my bank two over draft fees of about 70.00 total. I was able to contact paypal and have my account reverted back to using my buyers credit first. Needless to say, I doubt I'm the only person this has happened to. I've lived long enough to know, you can't beat the best scammers on the planet. Banks!

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Posted by
ALFRED HERNANDEZ
on September 25, 2011

BANK HAS RETURNED BANK OVERDRAFT FEES IF YOU ARE A DISABLED SENIOR ALL YOU HAVE TO DO IS TELL THEM YOU ARE I GOT BACK OVER 700 DOLLARS IF THEY NEED PROOF GET DOCTOR OR DMV DISABLED REGISTRATION HANDICAP CARD

Posted by
Irene Bolden
on September 25, 2011

I agree banks got very rich when times were good, and continue to prosper thanks to the government bail-out. It seems to me in exchange for that bail-out ALL fees should be suspended.

Banks Face Customers Angry About Overdraft Fees

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