Lawsuit Investigation into Overdraft Fees on Debit Card Transactions
Last Updated on December 21, 2018
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects:
- Anyone who used their debit card for a regular, everyday purchase, such as a ride with Uber, clothing purchase or travel booking, and was charged an overdraft fee.
- What’s Going On?
- It is suspected that some banks are charging overdraft fees when their contracts specifically forbid it. These fees, attorneys believe, are being levied on everyday purchases – when they should only be charged for recurring debits, such as automatic bill payments, that put customers’ accounts into the negative.
- What’s Being Done About This?
- Attorneys have been speaking with consumers about the issue to see if more class action lawsuits could be filed. Bank of America and Wells Fargo have already been sued.
Attorneys have been speaking with those who used their debit card and was charged an overdraft fee for an everyday, regular purchase, such as clothing, a ride with Uber or travel booking. It is believed some banks are levying overdraft fees when their contracts specifically forbid it.
Tell Me More!
In the financial world, there are two types of debit card transactions. Stay with us, here.
Non-recurring transactions refer to regular, everyday purchases that you make with no real set schedule. These can include groceries, gas, coffee, clothing and the like.
Recurring debit card transactions refer to those that you set up to occur automatically, such as utility, rent or credit card payments.
So, What’s the Issue Here?
Over the past decade, a number of banks have reportedly changed their contracts so that only recurring debit card transactions will incur overdraft fees should they put the account in the red; regular debit card purchases would instead be declined to help keep the account from being overdrawn.
Unfortunately, two major banks – Bank of America and Wells Fargo – have been sued over allegations that they are breaking their contracts and charging consumers overdraft fees on purchases that they shouldn’t be. Attorneys working with ClassAction.org believe other banks may be engaging in the same alleged practice.
What Transactions Should I Look Out For?
Attorneys believe some banks are wrongfully levying overdraft fees on debit card purchases with:
- Uber, Lyft or other ride services
- Ulta, Sephora and other beauty stores
- Target, Bed Bath & Beyond and other retailers
- Macy's and other department stores
- GrubHub and other food ordering/delivery services
- Lululemon, Athleta and Under Armour
- Famous Footwear, Footlocker, Finish Line, Aldo and other shoe stores
- Whole Foods and other supermarkets
- Gas stations
- Airfare, hotel bookings and other travel plans
This list is not exhaustive and only a sample of the transactions believed to be misclassified as recurring.
How Could a Class Action Lawsuit Help?
Class action lawsuits, if successful, could help customers get back money for overdraft fees found to be improperly charged to their accounts. Furthermore, a class action lawsuit could result in a court order requiring the bank(s) to change their practices.
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