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Access Federal Credit Union Overdraft Fees on Accounts Not Overdrawn Class Action

Banks and other financial institutions earn a lot of money on fees these days. The complaint for this class action alleges that Access Federal Credit Union has been charging overdraft (OD) fees on accounts that were never actually overdrawn, in violation of its own account agreements.

The class for this action is all account holders who, during the applicable statute of limitations, were charge OD Fees on APPSN transactions on an Access checking account. In the alternative, the complaint proposes a state class of New York account holders.

Access’s checking account agreements, the complaint alleges, say that Access will charge OD or non-sufficient funds (NSF) fees only on transactions that overdraw the accounts. For Access to charge OD or NSF in other situations, it claims, breaches the duty of good faith and fair dealing.

How does it manage to do this? The complaint claims it’s linked to a process call Authorize Positive, Purportedly Settle Negative (APPSN).

Here’s how it works, according to the complaint. When a customer attempts a debit card transaction, and there are sufficient funds to cover it, Access approves the transaction and sets aside the amount needed to settle the transaction. This original transaction does not settle immediately; it may not settle for several days. In the meantime, the funds needed to settle it are set aside; they are not reflected in the account’s available balance and the customer cannot use them for any other purposed.

However, if in the meantime a later transaction overdraws the account, the complaint alleges, Access charges an OD fee to settle the original transaction.

This should not happen, the complaint alleges: Because Access has set aside the amount needed for the original transaction, “customers’ accounts will always have sufficient available funds to cover these transactions because Access has already sequestered these funds for payment.”

According to the complaint, Access keeps a running balance of the funds that customers have available for use: “Indeed, the entire purpose of the immediate debit and hold of positive funds is to ensure that there are enough funds in the account to pay the transaction when it settles.”

The Consumer Financial Protection Bureau calls the APPSN transaction process “unfair” and “deceptive,” saying, “Consumers likely had no reason to anticipate this practice, which was not appropriately disclosed. They therefore could not reasonable avoid incurring the overdraft fees charged.”

“Because these withdrawals take place upon initiation,” the complaint contends, “they cannot be re-debited later. But that is what Access does when it re-debits the account during a secret batching posting process.” What Access does, the complaint alleges, “is to assay the same debit transaction twice to determine if the transaction overdraws an account—both at the time a transaction is authorized and later at the time of settlement.”

The complaint alleges, “There is no justification for these practices, other than to maximize Access’s OD Fee revenue.”

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Access Federal Credit Union Overdraft Fees on Accounts Not Overdrawn Complaint

October 29, 2021

Banks and other financial institutions earn a lot of money on fees these days. The complaint for this class action alleges that Access Federal Credit Union has been charging overdraft (OD) fees on accounts that were never actually overdrawn, in violation of its own account agreements.

Access Federal Credit Union Overdraft Fees on Accounts Not Overdrawn Complaint

Case Event History

Access Federal Credit Union Overdraft Fees on Accounts Not Overdrawn Complaint

October 29, 2021

Banks and other financial institutions earn a lot of money on fees these days. The complaint for this class action alleges that Access Federal Credit Union has been charging overdraft (OD) fees on accounts that were never actually overdrawn, in violation of its own account agreements.

Access Federal Credit Union Overdraft Fees on Accounts Not Overdrawn Complaint
Tags: Overdraft Fees, Your Bank