Many banks these days charge non-sufficient funds (NSF) fees if you don’t have enough money in your account for an auto-pay item when it comes due. Citizens Bank also does this. But how many fees can they charge on that item? Only one?
Or will you be surprised in the coming days to find two or even three NSF fees assessed to your Citizens Bank account for the same item?
Here’s how it works: You set up an auto-payment in your account for a regularly-occurring bill—for your auto loan or your Internet service, for example. The auto-payment date comes, your account doesn’t have sufficient funds, and the bank rejects it. You might say, “OK, I’ll wait until I have more money in my account before I try this payment again.” But Citizens doesn’t wait. It may decide, without any request from you, or notice to you, to retry the transaction. And if the transaction fails to go through again, then you owe another NSF fee.
Is this fair? We’re investigating to see if a class action is needed.
Some banks permit themselves to do this. They put it in the fine print in their deposit agreements, fee schedules, or other documents.
However, Citizens Bank documents say very little about NSF fees. The Citizens Bank Overdraft Privilege Disclosure says “You will be notified by mail of any non-sufficient funds items paid or returned that you may have; however, we have no obligation to notify you before we pay or return any item. The amount of any overdraft plus our standard Non-Sufficient Fund fee of $32.75 that you owe us shall be due and payable upon demand.”
Some legal experts believe that the use of the term “item” means something like “December Auto Loan Payment,” and that only one NSF fee can be charged per item. Citizens Bank does not mention a “Fee Per Try” or “Retry Fee” or anything similar.
Is Citizens Bank making charges that are not specified in its own agreements?
Citizens Bank is not small. Founded in 1828 in Rhode Island, it initially began expanding outside the state in the 1980s. It was owned between 1988 and 2014 by the Royal Bank of Scotland (RBS). Citizens Bank is now a subsidiary of Citizens Financial Group, Inc.
It has been involved in two recent controversies. First, in 2008, it failed to acknowledge it was being investigated by the Securities and Exchange Commission (SEC) for its involvement in the sub-prime mortgage crisis that caused the economic crash. Second, in 2015, it was assessed substantial fines for failing to properly credit the full amounts of customer deposits.
If you have a Citizens bank account in the US and you’ve been charged multiple NSF fees on a single item, we’d like to hear from you. Fill out the form on this page and let us know what your experience was.Article Type: Investigation