Thursday, April 2, 2009

Over the Top Overdraft Fees

As if banks weren’t in enough trouble already, now more than one is being sued for over-penalizing account holders with excessive overdraft fees.

According to, a suit filed by Georgia resident Ken Vollmer claims Wachovia “posted charges to consumer accounts in such a way as to maximize overdraft fees, even at times when the actual funds in the account are sufficient to cover the transaction.”
There are similar bad-faith bank fee suits pending in federal courts across the country, not only against Wachovia but also against Bank of America and Wells Fargo, which took over Wachovia last October. Those suits accuse the banks of deceptive practices intended to maximize bank profits at the expense of their customers and challenge bank policies governing the assessment of overdraft fees.
No one is denying banks their right to charge overdraft fees. It’s the method in which they post drafts and deposits that is being questioned. If banks rearrange postings, as court documents claim they are doing, to post larger amounts first this may be considered to be deceptive and in violation of states’ fair business practices laws.

What can you do? Keep tabs on your account and watch for questionable charges. You can learn more about how overdraft charges work and what you can do to minimize them at the Federal Reserve website.

No comments: