Timberland Bank Multiple NSF Fees, Unfair OD Fees Class Action

This class action takes issue with two practices allegedly engaged in by Timberland Bank. First, it claims the bank charges multiple non-sufficient funds (NSF) fees on a single item presented for payment. Second, it claims that Timberland imposes overdraft (OD) fees on accounts that were not actually overdrawn.

According to the complaint, “Timberland Bank’s Account Documents allow Timberland Bank to charge a single $30 NSF Fee when a transaction is returned for insufficient funds or paid despite insufficient funds.”

It claims that Timberland has rejected transactions and charged an NSF fee, then, when the item is presented again, charged a second NSF fee on the same item, even though the customer took no action to resubmit the item.

The complaint alleges that the practice of charging customers multiple NSF fees on one item is not standard among banks: some charge only one NSF fee, and most of those who do charge multiple NSF fees specifically outline this practice in their account documents. The complaint alleges, “Nowhere do Timberland Bank and its customers agree that Timberland Bank will treat each reprocessing of a check or ACH payment as a separate transaction, subject to additional fees.”

As to the overdraft fees for items that do not overdraw accounts, the complaint alleges that this happens with something called Authorize Positive, Purportedly Settle Negative (APPSN) transaction.

The complaint claims it works this way: When a customer attempts a debit card transaction, the bank approves it and puts aside the amount of the transaction. This money is not available to the customer for any other purpose and therefore should always be available to settle this debit transaction. However, if another transaction overdraws the account before the original debit transaction settles, Timberland may charge the customer an OD fee.

The complaint alleges, “Upon information and belief, … Timberland Bank releases the hold placed on [the] funds for the transaction for a split second, putting money back into the account, then re-debits the same transaction a second time…” This may make the original debit transaction settle into a negative account balance, for which Timberland charges an OD fee.

The complaint claims that the Consumer Financial Protection Bureau has called this practice “unfair” or “deceptive.”

Two classes have been defined for this class action:

• The Multi-NSF Class is all Timberland Bank checking account holders in Washington who, during the applicable statute of limitations, were charged multiple fees on the same item.
• The APPSN Class is all Timberland Bank checking account holders in Washington who, during the applicable statutes of limitations, were charged OD fees on transactions that were authorized into a positive account balance.

Article Type: Lawsuit
Topic: News
Tags: Insufficient or Non-Sufficient Funds Fees, Overdraft Fees, Unfair Business Practices, Your Bank