Banco Popular de Puerto Rico Hit with Class Action Over Allegedly Unlawful Insufficient Funds Fees

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Banco Popular de Puerto Rico (BPPR) has been named in a proposed class action lawsuit in which a man claims he was unlawfully charged three separate fees for a single transaction for which he had insufficient funds. According to the lawsuit, the bank has a “routine practice” of charging customers multiple insufficient funds fees (NSF), or both an NSF fee and an overdraft fee, on a single item despite stating in contracts that each transaction can only incur one fee.

The plaintiff says that on February 4, 2019, he attempted an automated clearing house (ACH) payment to American Express that was rejected due to insufficient funds in his account. Although BPPR charged the man an initial $15 NSF fee pursuant to its deposit agreement, the bank attempted to reprocess the same item two days later and charged the plaintiff an additional $15 NSF fee, the suit alleges. After another two days, the bank again reprocessed the item, labeled as a “retry payment,” and charged the man another $15, for a total of $45 in NSF fees on a single transaction, the case claims.

The lawsuit argues that the bank’s practice of charging multiple fees for one item violates the terms of its account documents, which allow for only one NSF or overdraft fee per transaction.

“There is zero indication anywhere in the Account Documents that the same item is eligible to incur multiple NSF Fees,” the complaint reads. “Indeed, the BPPR Account Agreement expressly states that ‘only one determination of availability of funds’ will be made for any ‘item.’”

Moreover, the lawsuit berates the defendant’s so-called “reject-then-pay” pattern of allegedly rejecting an initial transaction—which triggers an NSF fee—and then, a few days later, paying the item and charging an overdraft fee “despite the customer being in the same (insufficient funds) financial situation.” The case argues that this practice, the only purpose of which is to “maximize fee assessments,” is “an abuse of the discretionary powers” granted to BPPR under its contracts with customers.

The lawsuit seeks to certify two proposed classes of individuals who were charged either multiple NSF fees or an NSF fee and an overdraft fee for the same item in a BPPR checking account “within the applicable statute of limitations period.”