Citizens and Farmers Bank Improper Overdraft, NSF Fees Class Action

This is one in a line of class actions filed over the allegedly improper imposition of fees on checking accounts by banks and credit unions. The complaint alleges that Citizens and Farmers Bank assesses overdraft (OD) fees on certain transactions even when accounts were never overdrawn.

Plaintiff Jeffrey Minter lives in Virginia and has an account with Citizens and Farmers. The complaint alleges that at times the bank charges OD fees on certain debit card transactions that did not actually overdraw Minter’s account. The complaint claims the charges are imposed on what are called “Authorize Positive, Purportedly Settle Negative” (APPSN) transactions.

When an accountholder tries to make a debit card transaction, if the account has sufficient funds, their bank will authorize it. It will then set aside the amount of the transaction, and the accountholder’s available balance will then show the amount in the account minus the amount of the transaction. The complaint says, “As a result, customers’ accounts will always have sufficient available funds to cover these transactions because Citizens and Farmers has already sequestered these funds for payment.”

However, the bank may not settle the transaction—actually send the funds to the other party in the transaction—for several days. What happens with other transactions in those intervening days? The complaint quotes the bank’s Deposit Agreement as saying, “If another transaction is presented for payment in an amount greater than the funds left after the deduction of the temporary hold amount, that transaction will be a nonsufficient funds (NSF) transaction if we do not pay it or an overdraft transaction if we do pay it…”

The complaint alleges, “The account documents misconstrue Citizens and Farmers’s true debit card processing and overdraft practices.” That is because, the complaint says, of a “secret” batch posting process. “Specifically, Citizens and Farmers releases the hold on funds for the transaction for a split second, putting money back into the account, then re-debits the same transaction a second time.” This second time, the transactions may post into an overdrawn account, because of intervening transactions.

The complaint alleges that this is unfair and counter to the statements in the account documents. In addition, it claims that the bank charges more than one NSF fee on the same item if it is presented again.

Two classes have been defined for this class action.

  • The APPSN Class is all consumers who, within the applicable statute of limitations, were charged OD fees on APPSN transactions in their Citizens and Farmers bank account.
  • The NSF Class is all consumers who, within the applicable statute of limitations, were charged more than one NSF fee on the same item in their Citizens and Farmers bank account.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Citizens and Farmers Bank Improper Overdraft, NSF Fees Complaint

March 24, 2020

This is one in a line of class actions filed over the allegedly improper imposition of fees on checking accounts by banks and credit unions. The complaint alleges that Citizens and Farmers Bank assesses overdraft (OD) fees on certain transactions even when accounts were never overdrawn.

Citizens and Farmers Bank Improper Overdraft, NSF Fees Complaint

Case Event History

Citizens and Farmers Bank Improper Overdraft, NSF Fees Complaint

March 24, 2020

This is one in a line of class actions filed over the allegedly improper imposition of fees on checking accounts by banks and credit unions. The complaint alleges that Citizens and Farmers Bank assesses overdraft (OD) fees on certain transactions even when accounts were never overdrawn.

Citizens and Farmers Bank Improper Overdraft, NSF Fees Complaint
Tags: Excessive Fees, Overdraft Fees, Your Bank