Banks can charge overdrafts and NSF (non-sufficient funds fees) if your account doesn’t have enough money to process a transaction. Recently, overdraft fees have been subject to many lawsuits, which allege that some financial institutions use deceptive overdraft policies to maximize the amount of money they can get from customers.
As a result, you should check your account regularly and note your expenses and bank charges.
Here’s what you need to know about overdraft fees, NFS fees, and when you are entitled to compensation.
What are overdraft fees?
An overdraft fee is charged when your account goes into the negative (when a payment goes through, but it’s larger than the balance in your account) and Overdraft Privilege (ODP) is being used. The ODP will pay for items if your checking account has insufficient funds.
If you have overdraft protection in place, the payment will go through, but your account will be in overdraft until you put money in it to return it to a positive balance. If you don’t have overdraft protection, the transaction will fail to go through, and the bank will charge a non-sufficient funds fee.
What are NSF fees?
NSF stands for non-sufficient funds. This fee is charged when the bank tries to complete a transaction, but the payment fails to go through or is returned. You will see the insufficient funds notice on your receipt or the description line in your bank statement. The fee varies from institution to institution, but an NSF charge from Canada’s Big Five banks usually ranges from $45 to $48.
When are you entitled to compensation?
If you are charged with more than one NSF fee or overdraft fee for a single transaction, you can file a lawsuit or join a class action lawsuit.
Many customers affected by deceptive overdraft fees and unfair NSF fees have started filing an overdraft fees lawsuit against their banks and credit unions.
You’ll first need to contact overdraft fee attorneys and provide evidence that shows you were unlawfully charged unfair overdraft fees. Next, your lawyers will prepare a complaint and file it. A judge will then determine whether or not the bank’s procedures were lawful.
Shamis & Gentile, P.A can help!
Setting up automatic bill payments for monthly recurring payments or bills is a convenient way to manage your bills and ensure all your monthly expenses are paid for. However, things can get complicated when you are hit with an overdraft fee.
Fortunately, Shamis & Gentile, P.A. is investigating banks charging their clients overdraft fees when a recurring payment causes your account to go into overdraft.
For example, you may be charged more than one overdraft fee for one of your recurring payments that don’t go through. Banking institutions are supposed to charge one overdraft fee (or NSF fee) if the transaction fails to go through. But a problem occurs if a bank attempts to process the recurring payment again shortly after it could not go through (knowing the account has insufficient funds), thereby charging a second overdraft fee.
Here’s a real-world example. Imagine you have $100 in your account, and your gym tries to deduct a monthly payment of $110. Your bank charges you an overdraft fee because you don’t have sufficient funds to cover the transactions. The next day, your gym tries to deduct the money again, hitting you with another overdraft fee.
Are you annoyed with being charged multiple NSF & bank overdraft fees?
Get in touch with the non-sufficient funds (NSF) fee lawyers at Shamis & Gentile.
