BBVA Improper Charging of OD/NSF Fees California Class Action

In recent years, fees have earned a substantial portion of banks’ revenue. The complaint for this class action brings suit against BBVA USA for two practices related to fees: (1) charging overdraft (OD) fees on transactions that do not actually overdraw accounts, and (2) charging more than one non-sufficient funds (NSF) fee on a single item.

OD Fees on Transactions That Do Not Overdraw Accounts

The complaint claims that this is related to a practice called “Authorize Positive, Purportedly Settle Negative” or APPSN.

When a debit card transaction is authorized on an account, BBVA purportedly reduces the amount of funds in the account by the amount of the transaction. However, the transaction is not actually settled at that point—that is, the funds do not pass from BBVA to the merchant at that moment. The settlement may happen days later.

At the time of settlement, if a subsequent transaction has left a negative balance in the account, the complaint says, BBVA settles the earlier transaction into the negative balance and charges an overdraft fee. Since funds were purportedly set aside at the time the transaction was approved, and since the account holder cannot thereafter use these funds for another purpose, the account holder cannot avoid the overdraft.

The Consumer Financial Protection Bureau has express concern about this practice, which it calls “deceptive”: “Consumers likely had no reason to anticipate this practice, which was not appropriately disclosed. They therefore could not reasonably avoid incurring the overdraft fees charged. … [E]xaminers found that the failure to properly disclose the practice of charging overdraft fees in these circumstances was deceptive.”

More Than One NSF Fee on a Single Item

The complaint provides an example of this practice: Plaintiff Sarah Hill tried to transfer $4.19 to PayPal on September 13, 2019. Because her BBVA account did not have sufficient funds for this, she was charged an NSF fee of $32.

A few days later, BBVA retried the payment again a few days later, without Hill’s knowledge and without any request from her. Because the account still did not have sufficient funds, BBVA charged her a second $32 fee for the same item. This required that Hill pay $64 in fees on the single $4.19 item, without the payment ever being completed.

The complaint quotes BBVA account documents, alleging that neither of these practices is permitted by the bank.

Two classes have been defined by the complaint.

  • The APPSN Class is all holders of BBVA checking accounts in California who, within 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 holders of BBVA checking or money market accounts in California who, within the applicable statute of limitations, incurred more than one NSF fee on the same item.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

BBVA Improper Charging of OD/NSF Fees California Complaint

June 2, 2020

In recent years, fees have earned a substantial portion of banks’ revenue. The complaint for this class action brings suit against BBVA USA for two practices related to fees: (1) charging overdraft (OD) fees on transactions that do not actually overdraw accounts, and (2) charging more than one non-sufficient funds (NSF) fee on a single item.

BBVA Improper Charging of OD/NSF Fees California Complaint

Case Event History

BBVA Improper Charging of OD/NSF Fees California Complaint

June 2, 2020

In recent years, fees have earned a substantial portion of banks’ revenue. The complaint for this class action brings suit against BBVA USA for two practices related to fees: (1) charging overdraft (OD) fees on transactions that do not actually overdraw accounts, and (2) charging more than one non-sufficient funds (NSF) fee on a single item.

BBVA Improper Charging of OD/NSF Fees California Complaint
Tags: Additional charges in breach of contract, Overdraft Fees, Your Bank