Canandaigua National Bank & Trust Improper Overdraft Fees Class Action

Banks have sometimes been accused of charging overdraft (OD) or non-sufficient funds (NSF) fees in situations where customers would not have expected to incur them. This case brings suit against Canandaigua National Bank & Trust (CNB) for charging customers OD fees even when their statements never show an overdraft.

The National Class for this action is all CNB account holders in the US who, during the applicable statute of limitations, were charged OD fees on transactions that did not overdraw their checking accounts. A New York Subclass, for account holders in the state of New York, has also been defined.

The complaint quotes CNB’s Account Documents as promising to charge OD fees only when a transaction actually overdraws an account: “If we pay a debit Point of Sale transaction which overdraws the account, we may charge the Overdraft fee—POS and deduct the overdraft from the next deposit or use any other collection remedy. If we pay an item which is presented against uncollected funds, we may charge you the Uncollected Funds fee.”

The complaint comments that both are referred to as OD in this case: The OD fee, it says, is charged for point of sale debit card transactions and the Uncollected Funds fee is charge when the bank pays other types of transactions that overdraw the account.

How do the supposed overdraft happen? The complaint says, “CNB’s uniform policy and practice is to disregard the actual amount of money in the account or whether there is a negative balance and, instead, to assess OD Fees based on a manufactured balance that it does not disclose.”

This balance, the complaint says, is not the official balance of the account. “As such, it is reasonable for [plaintiff Michael Lee] and accountholders like hi[m] to interpret and understand CNB’s use of the term ‘balance’ as the official balance in the account, i.e.[,] the actual money in the account. Mr. Lee and class members could not reasonably have expected that CNB would assess OD Fees in this manner.”

As an example, the complaint claims that Lee was charged a $37 OD fee on July 2, 2019 “despite the fact that, according to the bank statement issued by CNB, his account never went negative and always had sufficient funds to cover the transaction.”

According to the complaint, “To the extent the account documents do not explicitly bar the policies described above, CNB exploits contractual discretion to the detriment of accountholders and breaches good faith and fair dealing when it uses these policies.”

The complaint alleges breach of contract, breach of the covenant of good faith and fair dealing, violation of the Electronic Funds Transfer Act (Regulation E), and violation of New York’s General Business Law.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Canandaigua National Bank & Trust Improper Overdraft Fees Complaint

May 21, 2020

Banks have sometimes been accused of charging overdraft (OD) or non-sufficient funds (NSF) fees in situations where they would not have expected to incur them. This case brings suit against Canandaigua National Bank & Trust (CNB) for charging customers OD fees even when their statements never show an overdraft.

Canandaigua National Bank & Trust Improper Overdraft Fees Complaint

Case Event History

Canandaigua National Bank & Trust Improper Overdraft Fees Complaint

May 21, 2020

Banks have sometimes been accused of charging overdraft (OD) or non-sufficient funds (NSF) fees in situations where they would not have expected to incur them. This case brings suit against Canandaigua National Bank & Trust (CNB) for charging customers OD fees even when their statements never show an overdraft.

Canandaigua National Bank & Trust Improper Overdraft Fees Complaint
Tags: Additional charges in breach of contract, Overdraft Fees, Your Bank