Philadelphia Federal Credit Union Charged Multiple Insufficient Funds Fees for Single Transactions, Class Action Claims

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A proposed class action lawsuit claims that Philadelphia Federal Credit Union (PFCU) has charged customers multiple $28 overdraft and non-sufficient funds fees (NSF) for single transactions in violation of its own account contracts.

Philadelphia Federal Credit Union’s governing account terms stipulate that the institution will charge only one NSF fee per item no matter how many times the transaction is reprocessed, according to the lawsuit. The case argues that a reasonable consumer would interpret the agreement as stating that the defendant’s attempts to reprocess payments will not count as a new item and are simply attempts to complete the original order. Therefore, these reprocessing attempts should not trigger NSF fees since they are essentially the same item, the suit alleges. In that light, the lawsuit goes on to cite the following section from PFCU’s account disclosures, which appear to state as much:

 “Nonsufficient Funds Returns. Any Check or pre-authorized transfer, or transaction made through the use of Your ATM or debit Card, or other electronic means, as is applicable (including any in-person transaction) that is presented to Us for payment on Your Account when Your Account lacks sufficient collected funds to pay any such item may, at Our option, be returned for nonsufficient funds or We may honor any such item and charge You a fee for doing so.

 […]

Subject to applicable law, You are responsible for paying any overdraft fees and charges assessed in connection with Our payment of an overdraft, as well as any NSF fees charged to Your Account when We dishonor and return an item for non-sufficient funds.”

While charging multiple NSF fees for a single item is permitted by law, the case contends that PFCU was not authorized to do so since the contracts that govern accounts with the institution state it will only charge one such fee per item. Although the case contends that a reprocessed transaction cannot be fairly considered a separate item, the defendant allegedly treats resubmitted payments as such anyway. More from the complaint:

                                                             

“An electronic item reprocessed after an initial return for insufficient funds cannot and does not fairly become a new, unique item for NSF fee assessment purposes.

PFCU breaches its contract when it charges more than one $28 NSF Fee on the same item, since the contract states—and reasonable consumers understand—that the same item can only incur a single NSF Fee.”

The plaintiff claims that she attempted to make a payment from her savings account that was rejected by the defendant. For this transaction, the plaintiff says she was charged a $28 NSF fee. According to the case, PFCU attempted to reprocess the transaction the next day despite denying it the day before, and charged the plaintiff a second $28 fee.

The lawsuit requests that the defendant be enjoined from its deceptive practices and provide restitution of all NSF fees paid to PFCU by proposed class members.