There’s more to having a bank account than simply depositing and withdrawing money. Bank accounts are the basis for your financial health. So it’s prudent to ensure you keep a close eye on yours. Fees can always sneak up on you, though, and none are so common as overdraft and NSF fees. In fact, according to the 2021 FinHealth Spend Report, banks charged a staggering $12.4 billion in overdraft fees in 2020 alone with 95 percent of those fees targeting individuals who are “financially vulnerable.” However, many Americans still struggle to understand why all their money is going toward bank overdraft and NSF fees and even why they’re being charged at all.
What Are Overdraft and NSF fees?
Overdraft fees are the charges posted when you don’t have the funds in your account to cover a transaction. Rather than declining the transaction, your bank will approve it and charge a fee to cover the cost of the purchase.
Nonsufficient funds fees (or NSF fees) are fees posted to your account when your bank declines a transaction that would have overdrawn. Usually, transactions are declined if the bank deems the purchase amount exceeds your available balance too much for the bank to cover or if you write a check that bounces. Debit card purchases are usually not hit with NSF fees.
How Do Banks Overcharge Customers?
Banks and credit unions make a significant amount of revenue from charging overdraft and NSF fees. Sometimes, they’ll even employ underhanded tactics to maximize the fees they can post for a single transaction.
Some of those shady practices include:
- Re-ordering transactions from most to least expensive so your account drains more quickly and increase the number of overdrawn transactions.
- Determining if a transaction overdrew the account by referencing “available balance” rather than the true balance of the account.
- Delaying deposits until all transactions are posted to the account.
- Tricking customers into opting-in to the bank’s overdraft program which authorizes overdraft fees.
- Charging multiple NSF fees for a single bounced check or bill payment.
- Transferring money from a linked account only after posting an overdraft charge.
- Employing a sustained overdraft fee which charges a high fee for every day the account is negative.
- Failing to limit the number of overdraft or NSF fees in a day.
- Charging an outrageous fee on a transaction that was less than five dollars.
Sound familiar? If you’ve noticed your bank is using these tactics on you unfairly, it may be time to take action.
Defending Your Hard-Earned Money in the Inland Empire
Banks and credit unions may hold their customers’ money, but they don’t own it. Unscrupulous fee structures and practices should not be the norm, especially for customers who struggle to make ends meet. The Financial Services attorneys at McCune Wright Arevalo, LLP, have a long history of successes against these bad actors including a $203 million verdict against Wells Fargo. With more than $1 billion recovered, you can feel confident that we will not stop fighting for you. If you believe your bank is charging your unfair or exorbitant overdraft and NSF fees, contact us or call (855) 976-3154 today to schedule your free consultation!