Umpqua Multiple NSF Fees for a Single Item Class Action

A number of class actions have been filed recently on the practice of some banks in charging multiple nonsufficient funds (NSF) fees, or an NSF fee followed by an overdraft (OD) fee, on a single item. The complaint for this one alleges Umpqua follows this practice, even though it is not permitted in its agreements with customers.

The Repeat NSF Class for this action is all US residents who have or have had accounts with Umpqua who were charged an NSF fee more than once for the same item, or an NSF fee and then an OD fee for the same item, between April 27, 2014 and the date the class is certified in this case. An Oregon Subclass has also been proposed.

When Umpqua processes certain transactions—such as debit card, ATM, check, and automated clearinghouse (ACH) transactions—if the account does not have sufficient funds to complete the transaction, it may charge the customer either an NSF fee or an OD fee.

The complaint alleges, “Overdraft fees and NSF fees are among the primary fee generators for banks.” It claims that a banking industry market research company has determined that in 2018 banks made around $34.5 billion from OD fees.

It also asserts that “the average cost of overdraft fees per transaction has gone up from $15 in 2000 to $29 in 2018. Umpqua has far outpaced this high average banking fee, charging instead a $35 fee.”

According to the complaint, Umpqua doesn’t only charge a high NSF fee: “Umpqua then charges an additional NSF fee, or an overdraft fee following the first NSF fee, if the same item is presented for processing again, even though the account holder took no action to resubmit the transaction for payment.”

The complaint claims that this breaches Upqua’s own Account Agreements. The complaint quotes the Account Agreement as saying, “If a check, item or transaction is presented without sufficient funds in your account to pay it, we may, at our discretion, pay the item (creating an overdraft) or return the item for insufficient funds (nonsufficient funds – NSF).”

The complaint comments, “It does not state Umpqua may charge ‘an overdraft fee and an NSF fee,’ but rather states Umpqua may charge, ‘an overdraft fee or an NSF fee.’”

Elsewhere, Umpqua’s Account Agreement states that when an item is returned, “We also charge you a fee for each returned item.” Again, the complaint notes that this is “a fee,” singular.

Furthermore, Umpqua’s Fee Schedule shows NSF and OD fees as “$35 per item,” not “$35 per presentment.”

The complaint quotes other banks’ Account Agreements to show language specifically authorizing the charging of multiple NSF fees or a combination of NSF and OD fees. Umpqua’s Account Agreements do not contain this language.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Umpqua Multiple NSF Fees for a Single Item Complaint

May 27, 2020

A number of class actions have been filed recently on the practice of some banks in charging multiple nonsufficient funds (NSF) fees, or an NSF fee followed by an overdraft (OD) fee, on a single item. The complaint for this one alleges Umpqua follows this practice, even though it is not permitted in its agreements with customers.

Umpqua Multiple NSF Fees for a Single Item Complaint

Case Event History

Umpqua Multiple NSF Fees for a Single Item Complaint

May 27, 2020

A number of class actions have been filed recently on the practice of some banks in charging multiple nonsufficient funds (NSF) fees, or an NSF fee followed by an overdraft (OD) fee, on a single item. The complaint for this one alleges Umpqua follows this practice, even though it is not permitted in its agreements with customers.

Umpqua Multiple NSF Fees for a Single Item Complaint
Tags: Additional charges in breach of contract, Your Bank