As all bank customers know, there is nothing inherently wrong with overdraft protection. It can help you out of a temporary financial bind and ensure that your bills get paid, even if your paycheck is a little late one month. However, problems arise from the fact that banks can charge high NSF/OD fees, making it a significant source of income for them. As a result, some banks resort to unethical practices in order to generate overdraft fees. These practices include questionable overdraft fees for recurring transactions, to reordering of credits and debits to push customers into overdraft so that banks can collect fees. Thousands of complaints have been filed against banks for this reason, and Shamis & Gentile, P.A. is handling an ongoing class action lawsuit as a result.
Overdraft vs. NSF Fees
There is an important distinction between the two types of fees charged by banks: overdraft fees and NSF fees.
These two types of fees are similar in that they are both charged when your account does not have insufficient funds to cover a transaction. However, there is a crucial difference. If you have an overdraft facility on your account, then the transaction will go through even if you don’t have available funds. The bank will then charge you for using this facility. On the other hand, if you do not have an overdraft facility, the transaction will simply be rejected when there are not enough funds. The bank may then charge you an NSF fee. It is not possible for an overdraft and NSF to be charged simultaneously.
How Do Overdraft Fees Work?
Overdraft fees occur when a payment is authorized from your account even though you do not have enough funds. Instead of declining the payment, your bank will pay it, essentially advancing you a small, short-term loan. You then need to deposit the funds back into your account to bring it back to a positive balance. You also need to pay the fee that the bank charges you for the credit they have offered.
Assuming that this happens with your prior consent, and you are charged as agreed, there is nothing wrong with this arrangement. In some cases, financial institutions charge exorbitant overdraft or NSF fees without the customer’s knowledge and consent, which may lead the latter to take legal action. It is important to understand what fees your bank is permitted to charge you, and don’t allow them to deduct anything to which they do not have a right.
What Can You Do About NSF/Overdraft Fees?
If you have been charged unfair NSF/OD fees, you can open a case against your bank. Consult with an overdraft fee lawyer to see if you have a strong case. You can then either file an individual complaint or join one of the many ongoing class action suits against the country’s leading banks.
Shamis & Gentile, P.A. provides outstanding legal services in Florida and New York. We distinguish ourselves because of our experience and resources, which we combine to handle any kind of case involving personal injury, personal injury protection, class actions/mass tort, and contract disputes. When you bring your case to Shamis & Gentile, P.A., you will always work with a seasoned attorney who has an excellent track record. We are progressive and trusted within the legal community and we are often called upon to settle cases that other law firms may not be able to handle on their own. With us, you can rest assured that your NSF/OD fees case is in safe hands.
