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Del-One Federal Credit Union Unclear Overdraft Disclosures Class Action

This class action brings suit against Del-One Federal Credit Union, alleging that Del-One does not fulfill the requirements of Federal Reserve Regulation E before it begins charging customers overdraft fees. The complaint claims that its disclosures offer “ambiguous and inaccurate language” as to when customers are charged overdraft fees and is therefore not compliant with the law. Even so, Del-One has been charging these overdraft fees.

Among other things, the complaint for this class action says, Reg E “requires financial institutions to provide complete, accurate, clear, and easily understandable disclosures of their overdraft services” and also get affirmative consent from the customer before it “can lawfully charge overdraft fees on non-recurring debit transactions and ATM withdrawals.”

It refers to a Del-One document purporting to tell customers what they “Need to Know About Overdraft[s] and Overdraft Fees,” saying that the language is ambiguous and inaccurate and doesn’t clearly describe the circumstances under which the customer will be charged an overdraft fee.

What is wrong with Del-One’s disclosure document? The complaint says, “Specifically, Del-One defines an overdraft … as when there is not enough money in the account to pay the transaction, but Del-One pays it anyway.” This is not true, the complaint contends, because it is not based on the actual account balance: “Instead, it is based on an artificially reduced calculation created by Del-One’s internal bookkeeping called the ‘available balance,’ which deducts holds for future transactions.” In other words, some funds may be on hold, waiting for approved transactions to settle.

“When these future holds are accounted for,” the complaint contends, “the calculation often results in a negative ‘available balance’ existing only on paper, even as there is actually enough money in the account at the time of payment and posting to cover the transaction without a negative account balance.”

The complaint says that Del-One has thus not disclosed to the customer which balance will be used to see whether the customer will be assessed an overdraft fee.

This, the complaint claims, means that Del-One charges overdraft fees on ten to twenty percent more Reg E transactions that it would otherwise.

Two classes have been defined for this action:

  • The Regulation E Class is all members and customers of Del-One who were assessed an overdraft charge on a one-time debit card or ATM transaction, between October 7, 2020 and the date the class in this action is certified.
  • The Delaware Consumer Fraud Act (DCFA) Class is all members and customers who were assessed an overdraft fee on a one-time debit card or ATM transaction, between October 7, 2018 and the date the class is certified.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Del-One Federal Credit Union Unclear Overdraft Disclosures Complaint

October 7, 2021

This class action brings suit against Del-One Federal Credit Union, alleging that Del-One does not fulfill the requirements of Federal Reserve Regulation E before it begins charging customers overdraft fees. The complaint claims that its disclosures offer “ambiguous and inaccurate language” as to when customers are charged overdraft fees and is therefore not compliant with the law. Even so, Del-One has been charging these overdraft fees.

Del-One Federal Credit Union Unclear Overdraft Disclosures Complaint

Case Event History

Del-One Federal Credit Union Unclear Overdraft Disclosures Complaint

October 7, 2021

This class action brings suit against Del-One Federal Credit Union, alleging that Del-One does not fulfill the requirements of Federal Reserve Regulation E before it begins charging customers overdraft fees. The complaint claims that its disclosures offer “ambiguous and inaccurate language” as to when customers are charged overdraft fees and is therefore not compliant with the law. Even so, Del-One has been charging these overdraft fees.

Del-One Federal Credit Union Unclear Overdraft Disclosures Complaint
Tags: Did Not Make/Receive Proper Disclosures, Overdraft Fees, Regulation E, Your Bank