Sunflower Bank Hit with Class Action Over Allegedly Unlawful Overdraft Practices

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Sunflower Bank, N.A. faces a proposed class action over its alleged practice of assessing more than one insufficient funds (NSF) or overdraft fee on a single transaction.

According to the 17-page case, Sunflower has violated the terms of its contracts with customers by failing to disclose its practice of charging multiple fees when there are insufficient funds in a customer’s account to cover the amount of a single transaction. Per the suit, the bank’s account documents explicitly state, and consumers understand, that only one $36 NSF or overdraft fee will be charged per “item.”

The lawsuit looks to require the defendant to cease its allegedly unlawful practices, which the case notes have a disparate impact on people living paycheck to paycheck and Black and Latino households.

“Sunflower’s improper scheme to extract funds from accountholders has victimized Plaintiffs and thousands of other similarly situated consumers,” the lawsuit charges. “Unless enjoined, Defendant will continue to engage in this scheme and continue to cause substantial injury to its consumers.”

The case claims that while Sunflower Bank states in its account documents that customers will incur a single fee when their account does not contain sufficient funds to cover a transaction, the defendant instead charges multiple fees per item—once at the time of the transaction and another when the item is reprocessed days later, in some cases without the accountholder’s permission. According to the suit, a transaction that Sunflower later reprocesses “is still the same item” as consumers understand it and should not be eligible to incur additional fees beyond the initial NSF or overdraft fee.

As the lawsuit tells it, Sunflower Bank’s account documents “never discussed a circumstance” in which the defendant could assess multiple NSF or overdraft fees for an item that was returned, reprocessed and returned again. Per the suit, “[i]t was bad faith and totally outside Plaintiffs’ reasonable expectations” for the bank to assess two or three NSF or overdraft fees when the individuals had each only attempted a single payment.

“In sum, Sunflower promises that one $36 NSF Fee or one $36 OD Fee will be assessed per ‘item,’ and this must mean all iterations of the same instruction for payment,” the complaint reads. “As such, Sunflower breached the contract when it charged more than one fee per item.”

The case goes on to allege that Sunflower amended its deposit agreement in November 2020 and, “[f]or the first time ever,” stated that accountholders may incur multiple fees when one item is presented more than one time.

The lawsuit looks to cover anyone who, within the applicable statute of limitations period prior to November 1, 2020, was charged multiple fees for the same item or transaction in a Sunflower checking account.

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