Atlantic Union Bank Charges Unlawful Overdraft Fees, Class Action Claims

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Atlantic Union Bank faces a proposed class action lawsuit that alleges the bank charges overdraft fees on transactions that do not actually overdraw customers’ accounts.

According to the 11-page lawsuit, Atlantic Union hit the plaintiff, a North Carolina resident, with $38 overdraft fees on several transactions she made between August and September 2021, even though her statements show a positive account balance at the time of the charges.

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The defendant’s alleged collection of overdraft fees on accounts with positive balances is not an error, but rather a “systematic and intentional” practice employed to maximize fee revenue, the suit contends.

“Through the imposition of these fees, Defendant has made substantial revenue to the tune of tens of millions of dollars, seeking to turn its customers’ financial struggles into revenue,” the case reads.

The complaint charges that the bank’s $38 overdraft fee is among the highest in the country and is collected from accountholders even when there are sufficient funds present to cover a purchase.

Atlantic Union’s policy of assessing hefty and unlawful overdraft fees is not only “unfair and unconscionable,” it is also a breach of the bank’s contractual promises, the filing alleges. The bank’s contract with accountholders states that only if an account has insufficient funds to cover a transaction will Atlantic Union pay the item and assess an overdraft fee, the lawsuit explains.

Per the filing, Atlantic Union has a duty to conduct business fairly with customers and is “prohibited from exercising its discretion to pile on even greater penalties on its accountholders.” Rather than acting in good faith, the bank “abuses that discretion to take money out of consumers’ accounts without their permission and contrary to their reasonable expectations that they will not be charged improper fees,” the lawsuit alleges.

Overdraft fees and insufficient funds fees generate billions of dollars of revenue for banks every year, the case explains.

“Unfortunately, the customers who are assessed these fees are the most vulnerable customers,” the suit reads. “Younger, lower-income, and non-white accountholders are among those who [are] more likely to be assessed overdraft fees.”

As a result, major banks nationwide are purportedly in the process of phasing out overdraft and insufficient funds fees altogether, and the New York Attorney General requested last year that other industry-leading banks do the same, the complaint relays.

The lawsuit looks to represent anyone holding an Atlantic Union checking account who was charged an overdraft and/or insufficient funds fee on a transaction that did not overdraw the balance, as evidenced by bank statements, during the applicable statute of limitations.

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