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AmeriCU Multiple NSF Fees and Improper OD Fees Class Action

This class action protests against two practices it alleges AmeriCU Credit Union improperly maintains: charging more than one non-sufficient funds (NSF) fee on a single transaction and charging an overdraft (OD) fee on transactions that did not actually overdraw accounts. The complaint alleges breach of contract and breach of the covenant of good faith and fair dealing.

Two classes have been proposed for this action:

  • The Multi-NSF Class is all AmeriCU accountholders who, during the applicable statute of limitations, were charged more than one NSF on the same item.
  • The APPSN Class is all AmeriCU accountholders who, during the applicable statute of limitations, were charged OD fees on debit card transactions that were authorized into a positive available balance.

The complaint quotes from a Washington Post article on predatory overdraft fees, such as multiple charges for a single item. The article says that the banks “are charging a fee for doing literally nothing…. [T]his is like asking a friend if I can borrow $20, only to have him take $10 out of my wallet for turning down my request.”

AmeriCU’s account agreements permit it to charge a single $28 NSF fee when it returns a transaction for insufficient funds or paid because of insufficient funds, the complaint contends. However, the complaint alleges, “AmeriCU’s Account Documents do not say that AmeriCU may repeatedly charge customers multiple fees on a single transaction. To the contrary, the Account Documents indicate AmeriCu will only charge a single NSF Fee on a transaction.”

The plaintiff in this case, Malinda Fairchild-Cathey, provided examples of extra NSF charges AmeriCU assessed to her account. These charges were for transactions that were resubmitted by merchants for payment without her request. On her statements, the transactions were labeled as “Retry Pymt.”

The complaint alleges, “The same check, ACH, or other electronic payment on an account is not a new ‘item’ each time it is rejected for payment then reprocessed…”

As to the OD charges, the complaint alleges they come about through a process called “Authorize Positive, Purportedly Settle Negative,” or APPSN.

Here’s how the process works, the complaint claims: When customers go to make a debit card transaction and they have enough money for it in their accounts, the bank authorizes the transaction and puts aside the amount of the transaction against the time when it is presented for settlement, which may be a few days later. The customers do not see these funds as part of the “available balance” in their accounts and they cannot use them for any other purpose. However, if another transaction overdraws the account before the settlement of the initial debit card transaction, AmeriCU then charges an OD fee for that debit transaction’s settlement.

The complaint says, “This means that many subsequent transactions incur OD Fees due to the unavailability of the funds sequestered for those debit card transactions.” The complaint alleges that, since AmeriCU sequestered the funds for the initial transactions, funds should always be available to pay them.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

AmeriCU Multiple NSF Fees and Improper OD Fees Complaint

October 27, 2021

This class action protests against two practices it alleges AmeriCU Credit Union improperly maintains: charging more than one non-sufficient funds (NSF) fee on a single transaction and charging an overdraft (OD) fee on transactions that did not actually overdraw accounts. The complaint alleges breach of contract and breach of the covenant of good faith and fair dealing.

AmeriCU Multiple NSF Fees and Improper OD Fees Complaint

Case Event History

AmeriCU Multiple NSF Fees and Improper OD Fees Complaint

October 27, 2021

This class action protests against two practices it alleges AmeriCU Credit Union improperly maintains: charging more than one non-sufficient funds (NSF) fee on a single transaction and charging an overdraft (OD) fee on transactions that did not actually overdraw accounts. The complaint alleges breach of contract and breach of the covenant of good faith and fair dealing.

AmeriCU Multiple NSF Fees and Improper OD Fees Complaint
Tags: Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing, Insufficient or Non-Sufficient Funds Fees, Overdraft Fees, Your Bank