Bank Overdraft Fee Litigation

Many banks charge customers overdraft fees of $30 or more on certain debit card and ATM transactions. Banks sometimes refer to this policy as “overdraft protection.”

In 2007, banks collected more than $17 billion in such overdraft fees. That number nearly doubled in 2008, as more and more consumers struggled to maintain positive checking account balances. In 2009, banks brought in $37.1 billion in overdraft charges alone. A 2008 FDIC study reports that overdraft fees for debit cards can carry an effective annualized interest rate that exceeds 3,500 percent.

In short, for too long American consumers have been paying huge amounts in overdraft fees to banks.

What’s worse, many banks charge these overdraft fees improperly – sometimes when an account has not even been overdrawn. In addition, many banks “re-order” transactions to cause the largest purchases to be debited before the smaller purchases, improperly leading to the imposition of more overdraft fees. Overdraft fees can add up to hundreds of dollars charged against a bank customer’s account over a short period of time, even when the customer makes only small debit card purchases.

We would like to hear from you if your bank has charged you with more than one overdraft fee in a short period of time.