SEFCU Hit with Class Action Over Assessing Allegedly Improper Overdraft Fees [UPDATE]
Last Updated on January 26, 2021
Story v. Sefcu et al
Filed: June 28, 2018 ◆§ 1:18cv764
A lawsuit has been filed against SEFCU over the federal credit union’s alleged practice of assessing improper overdraft fees on checking account transactions.
Case Updates
January 26, 2021 – Lawsuit Settled; Deal Awaits Final Approval
The proposed class action detailed on this page has been settled. If you’ve received this form in the mail, you might be able to file a claim for compensation.
A motion for preliminary approval of the settlement was submitted on September 28, 2020 to U.S. District Judge Mae A. D’Agostino, who gave the deal an initial green light on November 2. On January 6, 2021, the plaintiffs submitted to the court an unopposed motion for final approval of the settlement and class certification, found here.
According to court documents, the settlement covers four “classes” (i.e., groups) of SEFCU members:
- The "Sufficient Funds Class," defined as SEFCU members who paid an overdraft fee from June 28, 2012 to April 19, 2019 when there was enough money in their current balance to cover the transaction that resulted in the fee and who did not have their fee refunded;
- The "No Benefit Opt-In Class," defined as SEFCU members who from February 5, 2016, through December 28, 2018 paid an overdraft fee on a non-recurring debit card transaction that was not refunded;
- The "Multiple NSF Fees on a Single Item Class," defined as SEFCU members who from July 23, 2016 through March 31, 2020 were assessed and paid more than one non-sufficient funds or returned item fee for an ACH or check transaction that was re-submitted after being declined and was not refunded by the defendant; and
- The "Sweep From Savings to Checking Account Class," defined as SEFCU members who paid an overdraft fee assessed from July 23, 2016 through March 31, 2020 that was not refunded for transactions where funds were transferred the day after the fee was assessed from a member's savings account into the checking account in an amount that would have been sufficient to avoid the overdraft had the transfer been made the prior day.
The official settlement website can be found at http://www.sefcufeesclassaction.com/. To reach out to the settlement administrator with questions, click here.
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A proposed class action lawsuit has been filed against SEFCU over the federal credit union’s alleged practice of assessing improper overdraft fees on checking account transactions. The plaintiff, a New York consumer, claims the defendant engages in this conduct for ATM and non-recurring debit card transactions even when a customer has enough money in his or her account to cover a particular transaction.
“The charging for such overdraft fees breaches SEFCU’s contract with its customers,” including proposed class members, the 25-page case reads.
Citing potential violations of the federal Electronic Funds Transfer Act, the lawsuit claims the defendant’s overdraft assessment practices are inconsistent with how SEFCU describes to its customers the circumstances that dictate when an overdraft fee may be charged. More specifically, the suit says it’s SEFCU’s policy to hit customers with overdraft fees “based on an artificial and hypothetical internal calculation” by which the credit union deducts holds placed on pending debit transactions or deposits. According to the suit, the defendant relies on its own internal calculations to determine when an overdraft has occurred, and not the actual money in a customer’s account as required by its contracts.
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