Santander Multiple Non-Sufficient Funds Fees Investigation

An auto-pay bill comes due in your bank account and your bank refuses the transaction because you don’t have enough money in the account. How many non-sufficient funds (NSF) fees should you be charged for this? One should be enough, right? But if your bank is Santander Bank, NA, you might find yourself charged two or even more in the coming days.

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 Santander won’t 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. But Santander’s Personal Deposit Account Agreement doesn’t warn you that it will do this. It doesn’t seem to say anything at all about NSF fees. 

Its Personal Deposit Account Fee Schedule does contain a fee for “Insufficient or Unavailable Funds—Item Returned,” which is $35. A note says, “A maximum of six (6) item returned fees may be charged per business day.” “Item Returned” is singular, which some legal experts believe means that there can only be one such charge per item, with an item being something like “December car loan payment.” Using this understanding, the item remains the same item, no matter how many times the bank decides to try it. The fee schedule does not list a “Fee Per Try” or “Retry Fee” or similar charge. 

Is Santander violating its own agreements? 

Santander Bank, NA was formerly known as the Sovereign Bank. During the savings and loan crisis of the 1980s and 1990s, it expanded by acquiring numerous other banks. 

Sovereign did not fare well during the 2008 economic crash, suffering from losses related to its auto loans and stock it owned in Fannie Mae and Freddie Mac. The Spanish entity Santander Group already owned a substantial percentage of its shares, and in late 2008 it purchased the remainder of Sovereign, to which it gave its name in 2011.

Today, Santander Bank, NA operates primarily in the northeastern US, with 650 offices and more than $57 billion in deposits. It is not a small organization. 

If you have a Santander 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
Topic: Consumer
No case events.
Tags: Excessive Fees, More Than One Fee Assessed on a Single Item/Transaction, Your Bank