Bank of Guam Multiple NSF Fees on a Single Item Class Action

The Bank of Guam charges a non-sufficient funds (NSF) fee when an item is presented for payment and the respective account does not have the funds to cover it. But if the merchant presents the item again, does it have the right to charge the customer a second NSF fee? The complaint for this class action alleges that the bank’s agreements with customers does not permit this.

The class for this action is all Bank of Guam checking account holders who, during the applicable statute of limitations, were charged multiple fees on the same item.

The complaint alleges that “NSF fees disproportionately affect people who are living paycheck to paycheck…”

The plaintiff for this class action, Eusebio B. Bonifacio, Jr., has a checking account at Bank of Guam.

The complaint alleges, “Bank of Guam’s Account Documents allow Bank of Guam to charge a single $25 NSF Fee when a transaction is returned for insufficient funds or paid despite insufficient funds.” However, it claims that the bank breaches its agreements because it sometimes charges more than one such fee on a single transaction.

For example, the complaint alleges that Bank of Guam charged Bonifacio $25 in NSF/overdraft fees on July 20 and July 26, 2021. In both cases, the items had previously been submitted and returned unpaid, with Bonifacio being charged NSF fees. However, the merchants submitted them a second time, and even though they were still the same items as before, the complaint alleges, the bank charged a second NSF fee when it returned each one a second time.

The complaint quotes the Bank of Guam’s Account Documents as saying, “Returned Check/ACH—Insufficient Funds/Uncollected Funds: $25.00 per item returned.”

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, especially when—as here—[Bonifacio] took no action to resubmit the transaction.” A resubmission does not change an item into a new item, the complaint argues: “The Bank’s reprocessing is simply another attempt to effectuate an accountholder’s original order or instruction.”

The complaint points out that many banks do have account agreements that permit them to charge a new NSF fee every time an item is resubmitted for payment. It provides several examples of wording in account agreements that specifically permit this. But Bank of Guam does not have this kind of provision in its documents.

Bonifacio, the complaint alleges, “took only a single action to make a single payment; he therefore created only one transaction and may be charged only a single fee.”

Article Type: Lawsuit
Topic: Contract
Tags: Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing, Insufficient or Non-Sufficient Funds Fees, Your Bank