An auto-pay bill comes due in your bank account and your bank refuses the transaction because you don’t have enough money. How many non-sufficient funds (NSF) fees should you be charged for this? Should you be charged an NSF fee now and an overdraft (OD) fee later? If your bank is Digital Federal Credit Union (DCU), you might find yourself paying more than you thought, as the bank decides, on its own and without notice to you, to retry the transaction.
This is the way 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, the transaction is tried, and the bank rejects it. You might say, “OK, I’ll wait until I have more money in my account before I try to make this payment.” But DCU may not wait. It will decide, without any request from you, or notice to you, to retry the transaction on its own. And if the transaction fails to go through again, well, you owe another NSF fee.
Is this fair? We’re investigating to see if a class action is needed.
Some banks, in fact, permit themselves to do this. They put it in the fine print in their deposit agreements, fee schedules, or other documents.
DCU’s Account Agreement is vague. It says, “We may charge you more than one fee, including an Automatic Transfer from Savings fee and an Overdraft Item Paid or Returned Nonsufficient Funds fee, for a single transaction…” Elsewhere, it says, “We may charge a Returned Nonsufficient Funds fee and/or Overdraft Item Paid fee each time a merchant presents a single transaction for payment, even if that same transaction is presented for payment multiple times.”
Does this permit it to charge multiple NSF fees even when the merchant (or you) doesn’t request the transaction again? Some legal experts believe that an item like “December car loan payment” is only one item and that multiple fees should not be applied. And if DCU allows itself to charge both an NSF fee and an OD fee for a retry by the merchant, why not just charge the OD fee the first time?
DCU was opened in 1979 for the benefit of employees of the Digital Equipment Corporation. It is now the largest credit union with its headquarters in New England, with over 800,000 members and $8 billion in assets. Its branches include eighteen full-service locations in Massachusetts and four in New Hampshire.
If you have a DCU account in the US and you’ve been charged multiple NSF fees, or an NSF fee and an OD fee, 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