According to the Wall Street Journal, overdraft fees are at an all time
high-and consumer advocates know why. A new survey published by Pew Charitable
Trusts, found that nearly 50% of the banks in America still “reorder”
checking account transactions in an attempt to significantly increase
overdraft fees. This process involves processing larger withdrawals first,
while smaller transactions are left until last.
The survey reviewed the checking account practices of 44 major banks across
America and the results were disturbing. The banks continue to argue that
they reorder the transactions to ensure that important payments, such
as mortgages and student loans, don’t bounce. Yet consumer advocates
believe that this process exists solely to boost fees for the banks—a
practice that can quickly add up to a nice profit. The Consumer Financial
Protection Bureau estimates that 60% of banks’ fee-based revenue
actually comes directly from overdrafts.
While the average yearly number of overdrafts per account dropped over
the last 3 years, the median overdraft fee per transaction has actually
increased. This means that banks are not only reordering checks to boost
overdraft fees, but they are also increasing those fees as well. The average
is $30 per overdraft transaction-and some banks charge up to $50 per transaction.
In addition to reordering checks, the study found that up to 70% of banks
now require customers to take their disputes to binding arbitration rather
than court. Some are even trying to prevent their customers from joining
class action lawsuits. These new limits on resolving disputes put consumers
at a significant disadvantage when resolving complicated banking issues.
Reordering checks and high overdraft fees are a form of predatory lending
that must be eradicated. Banking institutions and credit services need
to take a proactive approach to protecting consumers against the malicious
effects of overdraft fees. Yet many do not. Instead, many look to these
overdraft bank fees as a way to supplement falling revenue from deposit accounts.
Unfortunately, banks and credit unions don’t have consumers’
best interests in mind, and they continue to engage in predatory lending
practices that are harmful to American consumers. If you have been the
victim of an unfair banking practice, such as excessive overdraft fees,
you need an experienced and aggressive Philadelphia class action law firm
on your side.
Contact Our National Bank Lawyers at Golomb & Honik, P.C.
At Golomb & Honik, our lawyers have extensive experience handling complex
class action lawsuits against banks and lenders accused of excessive overdraft
fees, fraud, or predatory lending. We are currently litigating bank overdraft
claims from Pennsylvania, New Jersey, and throughout the United States.
To learn more about your legal options or to schedule a free consultation call the
Philadelphia class action lawyers at Golomb & Honik, P.C. today at