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An overdraft occurs when an account holder draws more money than they have in the bank. Checking accounts are typically the most common accounts that experience overdrafts, and banks will often cover the overdrawn amount for the customer. In many cases, the bank, credit union or financial institution will charge an “overdraft fee” when the account is overdrawn. Each institution sets its own fee, and in most cases, fees average around $35. Some banking institutions also charge an additional amount per day for every day an account is overdrawn.
Federal law states that bank account holders must “opt-in” and agree to overdraft protection before a bank or credit union can charge an overdraft fee. According to the Consumer Financial Protection Bureau (CFPB), overdraft and bounced check fees “constitute the biggest single cost for consumers of owning a checking account.” The CFPB, a government agency responsible for consumer protection in the financial sector, estimates that Americans paid roughly $15 billion in overdraft fees in 2016.
Several banking institutions have allegedly engaged in improper overdraft fee practices, including:
When a bank, credit union, or other financial institution engages wrongful conduct by violating the terms of its customer agreements or otherwise engages in fraudulent or deceptive trade practices, they could be held liable for any damage that may result.
The actions of the defendants could constitute violations of federal and state law including fraud and misrepresentation, breach of contract, and violations of various state consumer protection laws.
Compensation may be sought for:
Account holders at various banking institutions and credit unions may be eligible to pursue damages through an overdraft fee lawsuit and are encouraged to seek the advice of an experienced consumer fraud attorney to learn more about their rights and remedies.
Overdraft fees can pile up, often Overdraft fees can pile up, often without the bank and credit union account holders realizing it. Account holders who have been wrongfully charged an overdraft fee may be able to file a claim and pursue compensation after a bank or credit union has improperly charged them for overdrawing their account.
Notice: We are no longer accepting cases from individuals affected by the following institutions:
Bank of America
Citigroup Inc.
JP Morgan Chase Bank
PNC Bank
US Bank
Wells Fargo & Company
Woodforest Bank
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