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Axos Bank Fees Not Permitted by Account Documents Class Action

The complaint for this class action claims, “Research shows that fees are the most important factor influencing consumers’ selection of a new banking provider.” It brings suit against Axos Bank, claiming that the bank misleads customers in its account documents as to the fees it will charge. At issue are (a) when it chooses to charge an overdraft (OD) fee and (b) its practice of charging more than one non-sufficient funds (NSF) fee (or an NSF fee and an OD fee) on a single item.

Two classes have been defined for this action:

The APPSN Class is all Axos checking account holders who, during the applicable statute of limitations, were charged OD fees on transactions that were authorized into a positive available balance.

The Multiple Fee Class is all Axos checking account holders who, during the applicable statute of limitations, were charged two or more fees (including NSF or OD fees) on the same item.

Overdraft fees
In Axos’s case, the complaint cites a practice called “authorize positive—purportedly settle negative” (APPSN).

Here’s how it works: When a consumer goes to make a debit card transaction, the bank approves the transaction and sets aside the corresponding amount. That amount is no longer included in the account’s displayed available balance. The complaint says, “As a result, customers’ accounts will always have sufficient available funds available to cover these transactions” when they settle.

However, if the customer reduces the account balance with other transactions before the earlier debit card transaction settles, then Axos may consider the earlier transaction as settling into a negative account balance.

The Consumer Financial Protection Bureau calls this process “unfair” or deceptive” because consumers do not understand how it works.

Multiple fees on a single item
Axos charges a fee if an item is presented for payment but the account does not contain sufficient funds to pay it. If it pays the item, it charges an OD fee; if it returns the item, it charges an NSF fee. Both of these are permitted by the account documents, which specify a fee charged per item.

However, if the item is returned, the complaint claims, Axos may decide to try to pay the same item a few days later. If the account still does not have sufficient fees to pay it, Axos charges a second NSF fee; if it decides to pay it then, it will charge an OD fee.

The complaint contends (1) that the account holder did not request the second attempt to pay the returned item, and (2) that the item does not become a different item each time it is reprocessed.

According to the complaint, additional fees charged after the first one are not permitted by the account documents.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Axos Bank Fees Not Permitted by Account Documents Complaint

September 20, 2021

The complaint for this class action claims, “Research shows that fees are the most important factor influencing consumers’ selection of a new banking provider.” It brings suit against Axos Bank, claiming that the bank misleads customers in its account documents as to the fees it will charge. At issue are (a) when it chooses to charge an overdraft (OD) fee and (b) its practice of charging more than one non-sufficient funds (NSF) fee (or an NSF fee and an OD fee) on a single item.

Axos Bank Fees Not Permitted by Account Documents Complaint

Case Event History

Axos Bank Fees Not Permitted by Account Documents Complaint

September 20, 2021

The complaint for this class action claims, “Research shows that fees are the most important factor influencing consumers’ selection of a new banking provider.” It brings suit against Axos Bank, claiming that the bank misleads customers in its account documents as to the fees it will charge. At issue are (a) when it chooses to charge an overdraft (OD) fee and (b) its practice of charging more than one non-sufficient funds (NSF) fee (or an NSF fee and an OD fee) on a single item.

Axos Bank Fees Not Permitted by Account Documents Complaint
Tags: Insufficient or Non-Sufficient Funds Fees, More Than One Fee Assessed on a Single Item/Transaction, Overdraft Fees, Your Bank