Texas Bank Overdraft Fee Lawyer

UPDATE: TD Bank Pays $122 Million Settlement for Illegally Charging $35 Overdraft Fees on Debit Cards and ATMs

In August 2020, TD Bank paid a $122 million settlement after the Consumer Financial Protection Bureau (CFPB) accused the bank of illegally charging $35 overdraft fees on ATM and debit card transactions. TD Bank told consumers it was a “free” program or a “feature” of their checking accounts. Instead, the program (called Debit Card Advance) authorized TD Bank to pay for transactions when there was not enough money in the account, and then charge $35 when they overdrafted the account. In many cases, customers did not give their consent to join the program.

Texas Banks Hit With Overdraft Fee Class Actions

A class action lawsuit accuses three Texas banks of profiting off military families and low-income customers by creating a “sickening” business model that is almost entirely dependent on charging excessive fees. The class action was filed against Fort Hood National Bank, First National Bank Texas, and First Convenience Bank.

What is an Overdraft Fee?

Banks and credit unions charge overdraft fees when a customer does not have enough money in their account to pay for a transaction on a debit card, paper cheque, automatic bill payment, or ATM withdrawal.

What is the Problem?

Each overdraft fee averages $30, even if the account is only overdrawn by $1. Many consumers are charged excessive fees again and again, ultimately paying hundreds or even thousands of dollars.

Banks Made $34 Billion in Overdraft Fees in 2017

Overdraft fees are a major source of financial pain for consumers, and a major source of income for financial institutions. In 2017 alone, banks collected $34.3 billion in overdraft fees, according to the Federal Deposit Insurance Corporation (FDIC).

How Banks Exploit Customers for Excessive Fees

Unfortunately, some banks and credit unions use abusive tactics to exploit their customers and maximize the odds of causing overdrafts. Here are just a few examples:

• Re-ordering transactions from largest dollar-amount to smallest, rather than processing each transaction in the order it was received
• Charging multiple fees for a single overdraft
• Charging 5 or more overdraft fees in a single day, typically when the account holder does not realize the account is overdrawn
• Posting deposits irregularly
• Targeting military service members and charging excessive interest
• And more

Processing Transactions Out-of-Order to Maximize Overdraft Fees

Dozens of class action lawsuits have been filed against banks and credit unions that processed transactions out-of-order to maximize the odds of an overdraft.

For example, say you have $100 in your account and you make purchases of $10, $20, and $100. Only the last transaction overdrew your account, but your bank re-ordered the transactions from highest to lowest, processing the $100 transaction first, in order to trigger three overdraft fees instead of just one.

Overdraft Fee Class Action Lawsuit Settlements

A growing number of class action lawsuits have ended with banks paying multi-million dollar settlements for charging excessive fees.

• $70 million — TD Bank (June 2019)
• $24.5 million — Navy Federal Credit Union (April 2019)
• $66.6 million — Bank of America (November 2017)
• $30 million — HSBC (March 2015)
• $203 million — Wells Fargo (May 2013)
• $410 million — Bank of America (March 2011)

Does Your Bank Charge Excessive Fees?

Here are a few examples of banks and credit unions that have been hit by lawsuits for charging excessive fees:

• American Savings Bank
• Bank of America
• Capital One
• Chase Bank
• Citizens Bank
• HSBC
• JPMorgan
• M&T Bank
• Navy Federal Credit Union
• PNC Bank
• TCF National Bank
• TD Bank
• United Federal Credit Union
• UMB Bank
• USAA
• Union Bank of California
• Wachovia
• Wells Fargo
• And many more

Need a Bank Overdraft Fee Lawyer in Texas?

Collen A. Clark is a true advocate for his clients and is passionate about helping Texans that have been injured or wronged.

Collen’s amazing success in the courtroom and well known dedication to his clients has earned him the recognition of his peers as one of The Top Trial Lawyers in Texas.”

The Clark Firm has assembled a team of trial lawyers with more than 100 years experience, participation in over 600 jury trials and $260 million in verdicts and/or settlements. Please use the form below to contact our law firm for a free case review.