Multiple Insufficient Funds Fees? Banks Under Investigation

Attorneys working with ClassAction.org have reason to believe that a handful of banks may have illegally charged customers multiple non-sufficient funds fees on the same failed transactions and are now gathering consumers to take action.

Specifically, the attorneys suspect that the banks not only charged consumers a non-sufficient funds fee when their check initially bounced or their autopayment was rejected, but again each time it was unsuccessfully reprocessed for payment by the recipient.

Two federal agencies recently came forward to warn financial institutions that levying multiple insufficient funds fees on the same transaction may put them at risk of violating the law. Indeed, multiple class action lawsuits have been filed over the practice, alleging it is deceptive and unfair and may violate consumers’ contracts.

Is This a Lawsuit? What Am I Signing Up For, Exactly?

You are not signing up for a lawsuit, but rather a process known as mass arbitration. This is a relatively new legal technique that, like a class action lawsuit, allows a large group of people to take action and seek compensation from a company over an alleged wrongdoing. Here is a quick explanation of mass arbitration from our blog:

“[M]ass arbitration occurs when hundreds or thousands of consumers file individual arbitration claims against the same company over the same issue at the same time. The aim of a mass arbitration proceeding is to grant relief on a large scale (similar to a class action lawsuit) for those who sign up.”

Some banks impose arbitration clauses on their customers that force them to resolve all disputes through this alternative form of resolution, which takes place outside of court before a neutral arbitrator as opposed to a judge or jury.  

It’s for this reason that attorneys working with ClassAction.org have decided to handle this matter as a mass arbitration rather than a class action lawsuit.

Bank Fees: Previous Lawsuits

In 2009, Wells Fargo was named in multidistrict litigation (MDL) that would eventually accuse more than 30 lenders of manipulating the order of customers’ transactions to levy as many overdraft charges as possible. In that matter, Wells Fargo was able to enforce its arbitration clause.

The bank had also previously been taken to task over claims it imposed excessive overdraft fees and violated a California law that protects consumers against fraudulent misrepresentations in a case that resulted in a $203 million payout. The Consumer Financial Protection Bureau (CFPB) also announced in December 2022 that Wells Fargo would need to pay more than $3.7 billion in fines and customer refunds to resolve claims of unfair and deceptive business practices, with more than $500 million going to those who paid improper monthly service fees, whose accounts were improperly frozen or closed, and who were charged improper overdraft fees.

Notably, in July 2023, the CFPB issued an order against Bank of America, a Wells Fargo competitor, finding that the bank’s assessment of “repeated” non-sufficient funds fees for bounced checks and ACH payments violates the Consumer Financial Protection Act of 2010. As part of the order, Bank of America was required to refund customers their repeat non-sufficient funds fees and pay a $60 million penalty.

How Much Does This Cost?

It costs nothing to sign up, and you’ll only need to pay if the attorneys win money on your behalf. Their payment will come as a percentage of your award.

If they don’t win your claim, you don’t pay.

Were you charged multiple non-sufficient funds fees on the same bounced checked or rejected autopayment? Check the list above to find out if your bank is under investigation and sign up by filling out the corresponding form. 

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