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Nutmeg State Financial Credit Union Multiple NSF Fees Class Action

Nutmeg State Financial Credit Union, claims the complaint for this class action, took money from customer accounts without authorization. Why? Nutmeg removed the money as non-sufficient funds (NSF) fees for returned items or for overdraft (OD) fees for items previously returned, but the complaint alleges that Nutmeg did not have the right to do so, because it was only authorized to take one such fee per item.

The class for this action is all members or customers who have or have had accounts with Nutmeg who were charged more than one NSF fee, or an NSF fee followed by an OD fee, for the same item, between August 16, 2015 and the date the class is certified in this case.

The complaint alleges, “Overdraft and NSF fees constitute a primary revenue generator for banks and credit unions.” It claims that a banking industry market research company, Moebs Services, found that in 2018 alone, overdraft fees provided around $34.5 billion to banks and credit unions.

The Consumer Financial Protection Bureau notes that customers receive little or no benefit in exchange for their NSF fees because “returning an item generally confers little benefit to the consumer…” And although OD fees do provide the benefit of paying the item, the effective interest rate is very high. Furthermore, the complaint notes that the rejection of certain charges is automated, so that financial institutions do not take risks or bear costs. The complaint alleges, “Accordingly, the overdraft and NSF fee is a punitive fee rather than a service fee…”

Even worse, some banks charge more than one NSF fee, or an NSF fee and an OD fee, on a single item. While the account agreements for certain banks specifically permit them to do this, the complaint alleges that Nutmeg’s Membership Account Agreement does not.

The complaint quotes it as saying, “We do not have to notify you if your account does not have sufficient available funds in order to pay an item.” The complaint also points out that the account agreement speaks of “a charge for each item,” and not plural fees for a single item, or additional fees when items are presented again. “Furthermore, the fee schedule also states that fees are charged ‘per item’ in the singular.”

Nevertheless, the complaint alleges, Nutmeg has charged the plaintiff in this case, Malcolm Archibald, multiple NSF fees on certain transactions.

The complaint details a number of transactions in Archibald’s account for which he was charged NSF fees, authorized by the account agreement. It then says, “However, what was not authorized by the Account Agreement was [Nutmeg] charging [Archibald] another six retry fees on those transaction… In charging a second $35 fee for the same items, [Nutmeg] increased the fee [for] these returned items from $210 to $420. This multiplication of fees was not authorized and is in direct conflict with the Account Agreement and Fee Schedule that identifies a $35 fee for an NSF returned item…”

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Nutmeg State Financial Credit Union Multiple NSF Fees Complaint

August 16, 2021

Nutmeg State Financial Credit Union, claims the complaint for this class action, took money from customer accounts without authorization. Why? Nutmeg removed the money as non-sufficient funds (NSF) fees for returned items or for overdraft (OD) fees for items previously returned, but the complaint alleges that Nutmeg did not have the right to do so, because it was only authorized to take one such fee per item.

Nutmeg State Financial Credit Union Multiple NSF Fees Complaint

Case Event History

Nutmeg State Financial Credit Union Multiple NSF Fees Complaint

August 16, 2021

Nutmeg State Financial Credit Union, claims the complaint for this class action, took money from customer accounts without authorization. Why? Nutmeg removed the money as non-sufficient funds (NSF) fees for returned items or for overdraft (OD) fees for items previously returned, but the complaint alleges that Nutmeg did not have the right to do so, because it was only authorized to take one such fee per item.

Nutmeg State Financial Credit Union Multiple NSF Fees Complaint
Tags: Insufficient or Non-Sufficient Funds Fees, More Than One Fee Assessed on a Single Item/Transaction, Your Bank