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Several of the nation’s largest banks are the targets of lawsuits over their policies for overdraft fees.
Bank of America Corp. (NYSE:BAC), Wachovia Corp., U.S. Bancorp (NYSE:USB), JPMorgan Chase & Co. (NYSE:JPM) and Citibank Inc. (NYSE:C) are named in the suits, which were filed in federal court in Florida.
“In the era of electronic banking and the ubiquitous use of debit-card transactions, the assessment of overdraft fees has become a major profit center for many U.S. banks,” the suit against JPMorgan Chase reads.
The plaintiffs in that case are from Florida, Indiana, Texas, Louisiana and Georgia. The suits seek class-action status.
A recent study by the Center for Responsible Lending found banks and credit unions raked in close to $24 billion in overdraft fees last year. That’s a 35 percent increase from two years ago.
“In many instances, these overdraft fees cost customers hundreds of dollars in a matter of days, or even hours, when they may be overdrawn by only a few dollars,” lead plaintiffs’ counsel Bruce Rogow says in a news release. “Charging a $35 overdraft fee when a college student uses her debit card to buy a cup of coffee is unconscionable.”
Rogow suggests banks simply decline to honor a transaction or warn customers that if the transaction goes through, they will be charged a fee.
The suits asks the court to stop the banks from charging overdraft fees and from engaging in “wrongful, unfair and unconscionable practices.” They also ask for restitution along with actual and punitive damages.
Bills before U.S. Congress would require that consumers be notified before any fee is imposed in connection with any transaction for any overdraft-protection service provided.
In response, several banks also recently announced they are changing their overdraft programs.
Last month, Wells Fargo & Co. (NYSE:WFC), parent of Wachovia Corp., said it was eliminating fees for customers when they overdraw their accounts by $5 or less. BofA won’t charge fees when a customer’s account is overdrawn by less than $10 for one day.
Wells Fargo and BofA also will charge no more than four overdraft fees per day.
A spokeswoman for the American Bankers Association said they hadn’t seen the lawsuits and couldn’t comment.
Bank of America Corp. (NYSE:BAC), Wachovia Corp., U.S. Bancorp (NYSE:USB), JPMorgan Chase & Co. (NYSE:JPM) and Citibank Inc. (NYSE:C) are named in the suits, which were filed in federal court in Florida.
“In the era of electronic banking and the ubiquitous use of debit-card transactions, the assessment of overdraft fees has become a major profit center for many U.S. banks,” the suit against JPMorgan Chase reads.
The plaintiffs in that case are from Florida, Indiana, Texas, Louisiana and Georgia. The suits seek class-action status.
A recent study by the Center for Responsible Lending found banks and credit unions raked in close to $24 billion in overdraft fees last year. That’s a 35 percent increase from two years ago.
“In many instances, these overdraft fees cost customers hundreds of dollars in a matter of days, or even hours, when they may be overdrawn by only a few dollars,” lead plaintiffs’ counsel Bruce Rogow says in a news release. “Charging a $35 overdraft fee when a college student uses her debit card to buy a cup of coffee is unconscionable.”
Rogow suggests banks simply decline to honor a transaction or warn customers that if the transaction goes through, they will be charged a fee.
The suits asks the court to stop the banks from charging overdraft fees and from engaging in “wrongful, unfair and unconscionable practices.” They also ask for restitution along with actual and punitive damages.
Bills before U.S. Congress would require that consumers be notified before any fee is imposed in connection with any transaction for any overdraft-protection service provided.
In response, several banks also recently announced they are changing their overdraft programs.
Last month, Wells Fargo & Co. (NYSE:WFC), parent of Wachovia Corp., said it was eliminating fees for customers when they overdraw their accounts by $5 or less. BofA won’t charge fees when a customer’s account is overdrawn by less than $10 for one day.
Wells Fargo and BofA also will charge no more than four overdraft fees per day.
A spokeswoman for the American Bankers Association said they hadn’t seen the lawsuits and couldn’t comment.
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