Class Action Claims Credit Union of New Jersey Charges Unauthorized Overdraft Fees

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A proposed class action alleges Credit Union of New Jersey (CUNJ) has improperly charged $30 overdraft fees on transactions for which customers’ accounts have contained enough money to avoid being overdrawn.

The 11-page breach-of-contract case alleges CUNJ’s “deceptive, unfair and unconscionable” practice of repeatedly assessing overdraft fees on transactions that have not actually overdrawn an account is contradictory to the “plain, clear and simple language” in the financial institution’s contracts with accountholders.

“In short, CUNJ is not authorized by contract to charge OD Fees on transactions that have not overdrawn an account,” the complaint reads. “But CUNJ nonetheless has done so and continues to do so, in breach of its contract with its account holders.”

According to the case, CUNJ’s checking account contract documents state clearly that the credit union will only charge an overdraft fee for a transaction in the event that “the available funds in your share or deposit account are not sufficient to pay the full amount of a check, draft, transaction, or other item, plus any applicable fee.”

Nevertheless, the defendant, the lawsuit alleges, has regularly charged $30 overdraft fees on transactions for which a customer has sufficient funds in their account to cover the amount at issue.

The plaintiff, a Hamilton, New Jersey resident, claims she was charged $30 overdraft fees for routine transactions “on numerous occasions” even though her CUNJ account statements clearly show that her account never had a negative balance as a result of a “supposed overdraft event.”

“By definition, then, there were always funds to pay the full amount of those transactions—yet CUNJ assessed an OD Fee on them anyway,” the complaint claims.

Per the lawsuit, nowhere in CUNJ’s account agreement or extended coverage consent form does the credit union disclose that an overdraft fee may be charged on transactions that do not overdraw an account. The case claims the defendant’s conduct amounts to a violation of its account agreements with its customers.

The lawsuit looks to cover anyone in the U.S. who, within the applicable statute of limitations period, was charged an overdraft fee as a result of a transaction that did not overdraw their account, with a proposed subclass of New Jersey residents who meet the same criteria.

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