Banks may charge overdraft (OD) or non-sufficient funds (NSF) fees when transactions overdraw accounts. But the complaint for this class action claims that Provident Bank also charges OD fees in instances where transactions do not overdraw accounts. These transactions are known as APPSN transactions, that it, “Authorize Positive, Purportedly Settle Negative.”
The class for this action is all Provident Bank checking account holders who, during the applicable statute of limitations, were charge overdraft fees on transactions that were authorized into a positive available balance.
According to the complaint, these transactions occur because of an improper processing procedure on the part of Provident.
When Provident authorizes a debit card transaction, the complaint says, it immediately reduces the amount of available funds in the checking account by the amount of the transaction. This is the “Authorize Positive” part of the APPSN transaction. These funds are not available to the owner of the account for any other purpose, and the amount displayed to the account owner after that as remaining in the account no longer includes these funds.
The complaint alleges, “Therefore, customers’ accounts will always have sufficient available funds to cover these transactions because Provident Bank has already sequestered these funds for payment.”
Also, the complaint claims that the point at which the bank authorizes the transaction is the point at which it can decide to pay or reject the transaction; it cannot change its mind later.
How, then, does Provident end up charging OD fees on these transactions? The transaction may not settle for several days after it is authorized, the complaint claims, and the problem occurs if, during this time, another transaction overdraws the account. This is the “Purportedly Settle Negative” part of the APPSN transaction.
The complaint alleges that Provident uses “a secret posting process” that may seem to result in an overdraft by the earlier transaction. “Upon information and belief,” the complaint claims, at the time of settlement, “Provident Bank releases the hold placed on funds for the transaction for a split second, putting money back into the account, then re-debits the same transaction a second time.” Because the amount that was put aside for the transaction and the amount needed to settle the transaction are the same, the overdraft is not cured, and Provident charges the customer an OD fee for the settlement.
According to the complaint, the Consumer Financial Protection Bureau (CFPB) calls this practice “unfair” and “deceptive.” The complaint quotes the CFPB as saying, “Consumers likely had no reasons to anticipate this practice, which was not appropriately disclosed. They therefore could not reasonably avoid incurring the overdraft fees charged.”
Article Type: LawsuitTopic: Contract
Most Recent Case Event
Provident Bank Overdraft Fees on Accounts Not Overdrawn Complaint
June 3, 2022
Banks may charge overdraft (OD) or non-sufficient funds (NSF) fees when transactions overdraw accounts. But the complaint for this class action claims that Provident Bank also charges OD fees in instances where transactions do not overdraw accounts. These transactions are known as APPSN transactions, that it, “Authorize Positive, Purportedly Settle Negative.”
Provident Bank Overdraft Fees on Accounts Not Overdrawn ComplaintCase Event History
Provident Bank Overdraft Fees on Accounts Not Overdrawn Complaint
June 3, 2022
Banks may charge overdraft (OD) or non-sufficient funds (NSF) fees when transactions overdraw accounts. But the complaint for this class action claims that Provident Bank also charges OD fees in instances where transactions do not overdraw accounts. These transactions are known as APPSN transactions, that it, “Authorize Positive, Purportedly Settle Negative.”
Provident Bank Overdraft Fees on Accounts Not Overdrawn Complaint