According to a MarketWatch report based on data collected from Moebs Services, consumers pay an estimated $34 billion in overdraft fees every year. Unfortunately, the reality is that banks and financial institutions are racking up much of this excessive amount through unfair practices.
Thousands and thousands of Americans are paying overdraft fees on pending transactions and wondering why. Here is a summary of the Bank Overdraft Protection Law and how you can take action if you feel that you have been charged overdraft fees unfairly.
What does the Bank Overdraft Protection Law say?
First and foremost, the law says that it is illegal for banks to enroll their clients in automatic overdraft coverage, which allows banks to process transactions when customers do not have sufficient funds available. Banks generally charge a hefty fee if and when any of these transactions go through. The law states that these transactions should be immediately rejected if the client has insufficient funds unless he or she has actively chosen to opt-in to overdraft coverage. It is important to note that the law only encompasses transactions that have not been pre-authorized, such as ATM withdrawals and debit card payments. Pre-authorized withdrawals, such as automatic bill payments and checks, do not fall under the umbrella of the overdraft protection law and can still lead to overdraft charges.
The bottom line is that clients can be charged overdraft fees on pending transactions because some transactions are processed overnight and may not immediately reflect in an available balance. That is why it is so important to balance your monthly statement.
How to take action
If you feel that you have been impacted by unfair overdraft fees or deceptive overdraft practices, you can opt to file an overdraft fees lawsuit against your credit union or bank. If your bank happens to be Pacific Western Bank, it is also possible to join a bank overdraft fees lawsuit.
Here at Shamis & Gentile, P.A., we are here to help you navigate the law when it comes to being charged overdraft fees on pending transactions. Contact us today to set up an appointment to speak directly to our overdraft attorneys.