HSBC Bank USA, N.A. is facing a proposed class action that claims the institution breached the terms of its contracts with customers and violated New York’s General Business Law by charging multiple non-sufficient funds (NSF) fees for single transactions.
According to the complaint, the lead plaintiff in May 2019 attempted to make a payment to Santander through her HSBC checking account that was rejected by the defendant due to insufficient funds (NSF). The plaintiff was allegedly charged a $35 NSF fee for the initial transaction and then hit with a second $35 fee when HSBC attempted to reprocess the same item 12 days later without a request from the plaintiff to do so. Further, the plaintiff claims she attempted to make a June 2019 payment to Geico that was similarly declined due to non-sufficient funds and again reprocessed later, resulting in two fees that totaled $70.
While the lawsuit concedes that banks are permitted to charge multiple NSF fees on single items, this practice must be specifically disclosed in a bank’s agreements with its customers, the case contends. HSBC’s account documents, according to the complaint, do not allow the bank to charge multiple NSF fees on a single item.
The “Fee Schedule” in the defendant’s account documents reportedly state that an insufficient funds fee will be charged “[f]or each withdrawal, check, electronic funds transfer or other item that overdraws your account,” noting that “[a] fee is charged whether we pay or return the item.” According to the case, this language indicates to a reasonable consumer that a single transaction can incur only one NSF fee. Furthermore, the complaint contends that the same transaction cannot be considered a new item each time HSBC attempts to reprocess it, and therefore cannot be subject to multiple NSF fees under the terms of the defendant’s account documents.
The suit requests that HSBC be enjoined from its allegedly wrongful conduct and seeks reimbursement for all customers to whom the bank charged multiple NSF fees on a single item.