Bank Overdraft Practices
Banks are able to generate billions of dollars in revenues each year due to customer overdraft fees. In many cases, the fees are obtained by way of unfair policies. Such issues as reordering transactions, no notification of overdrafts and high price charges for overdrafts are only a small portion of what banks will do to increase revenues at the consumer expense. At Sheehan & Associates P.C., we focus on providing legal assistance to individuals affected by bank overdraft claims. Our attorneys will pursue a claim regarding banks that used methods of deception to generate excessive fees from checks and debit cards.
Protection from Bank Overdrafts
When a checking account is opened, it is the responsibility of the account holder to keep the account in good standing. Enough money should be in place to pay for checks that are written or charges to your debit card. In the past, banks would automatically provide overdraft protection without the knowledge of the account holder. Now, current laws state that if an account holder wants such protections, they have to opt in.
Overdraft protection provides automatic coverage of the purchases up to a pre-set amount. Once that amount is surpassed, a fee is charged for the service. This can be $25 to $50 for each overcharge. If you overdraft, you can end up paying hundreds of dollars in fees without even knowing.
Issues Involving Overdraft Fees
A central way in which a bank will increase overdraft fees of the consumer is to reorder transactions. Instead of a transaction being posted to the account in the order it was made that day, the bank will take the biggest check first. When you move the transactions out of order and go from highest amount to lowest, overdrafts are more likely to occur.
Take for example an individual who spent $10 on food, then $50 to pay a bill then they took out $100 from the ATM, from an account with $140 in it. If the money was spent in that order, then the overdraft would occur after the $100 charge. Which would require only one overdraft fee. However, if the transactions are rearranged, in the opposite order, then two charges would be hit with an overdraft fee.
Such changes are not going to be noticed by the consumer and the fees paid. Though, if the purchases were in the correct order, the fees would be much lower or possibly nonexistent based on the time of the transactions.
This is where we come in. Our team is happy to assist when you experience an overdraft issue with your financial institution. Our attorneys will review your case and determine if the bank treated you unfairly with the overdraft fees charged. Once we take a look at your financial records, we can create a course of action to ensure that your legal rights are served.
Banks are legally responsible to provide quality services to their clients. If you have been treated unfairly, give our office a call. We can easily assist in reviewing your overdraft fees and create a claim.