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Is the reordering of bank transactions legal in California?

Oct 05, 2020
Shamis & Gentile, P.A.
COBRA Notice Class Action Lawsuit

A 2012 whitepaper by the Consumer Financial Protection Bureau confirmed that banks have been reordering transactions in a way that can lead to excessive overdraft fees. For example, Wells Fargo reshuffles the transactions into numeric order by value, paying them highest to lowest at the end of the day they arrive at the bank for payment. This is not surprising, as overdraft fees bring in massive revenue for the banking industry. The record year for banks was 2009 when they made $37 billion from overdraft fees.

In 2010, federal law declared that if an account lacks sufficient funds, banks must abnegate transactions by default. You can opt-in for overdraft coverage (if your bank offers the service) at a fee. But banks cannot automatically enroll you for overdraft coverage.

What can happen if a bank changes the reordering of your bank transactions?

If your financial institution has been reordering transactions, they will use the excuse that it is all to do with which debits are grouped into sub-batches and the order in which these sub-batches are processed. The bottom line for you, though, is that regardless of what order transactions occurred on a single day, some banks process the largest transactions first leading to a lot of extra fees for you to pay.

Will Shamis and Gentile, P.A. provide me with legal advice to challenge big banks shuffling the order of my bank transactions?

While not all banks have been sued or are involved in litigation, many are currently being investigated. Shamis and Gentile, P.A. is investigating credit unions and banks such as Wells Fargo, Bank of America, and other big banks for unfair practices such as the reordering of credits and debits to push customers into overdraft.

Many customers have already filed bank overdraft fee class action lawsuits, resulting in ongoing multi-district litigation (MDL). Leverage our experience and legal resources to handle virtually any class-actions in California, Miami, New York, and Dallas.

Best of all for cash-strapped consumers, bank overdraft fee lawyers pay the costs involved in the process of filing a bank overdraft lawsuit and of retaining experts.

Contact Shamis and Gentile, P.A. if you feel that your financial institution has been reordering your bank transaction.

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