Legal Ramifications Of Bank Overdraft Fees
An overdraft is a banking term for the situation wherein a withdrawal from a bank account causes the balance to fall below zero. When this happens, banks typically charge their depositors a bank overdraft fee. This amount differs from bank to bank, and some banks may even institute differing policies with regard to overdrafts. Most banks actually allow their depositors to overdraw their accounts by a certain amount. If the amount of the overdraft falls within the pre-agreed amount, the depositor will only be charged the normal amount of interest. In situations wherein the amount of the overdraft exceeds the pre-agreed limit however, the depositor will be liable for additional fees, and possibly a higher rate of interest.
These policies are generally considered part of the territory when dealing with banks, and they are all allowed by law. However, there are instances wherein depositors are charged overdraft fees that are way in excess of reasonable amounts. When this happens, the financial burden on the part of the depositor may be significant. It is for this reason that some depositors file lawsuits against their banks for charging excessively high overdraft fees.
If you have been routinely charged high overdraft fees by your bank, you may have some protection under the law. Depending on the circumstances of your case, you may be eligible to file a lawsuit for compensation, or to have the bank cease this practice. If the bank in question has been the subject of similar complaints in the past, you may even be included in a class action lawsuit that disputes such policies.
You should also adopt a policy of keeping thorough records of all your bank transactions. If possible, try to get copies of all your transaction records on paper, and don’t rely on the bank’s own digital records. By making sure your records are complete and up-to-date, you will be better able to provide your lawyer with supporting documents in the event that a dispute arises with regard to bank overdraft charges.
If possible, you should make every attempt to work with the personnel of your bank in order to get to the bottom of the issue at hand. Some cases of excessive bank overdraft fees are simply the result of human error, and you may be able to rectify the issue by bringing it to the bank’s attention. If you fail to come up with an adequate resolution to your issue however, your only recourse may be to seek legal action.
Bank overdraft disputes are some of the most vigorously contested lawsuits in the United States today. In recent years, some high-profile banks have had to settle class-action lawsuits involving allegedly criminal overdraft fees. One such class-action suit involved TD Bank, which has entered into settlement proceedings amounting to $62 million.
If you have experienced an overdraft dispute with your bank and are unable to come up with a mutually favorable resolution, it is important to seek legal representation as soon as possible. This will help ensure protection against further costs and possibly even compensation for any unjust fees that you may have already incurred.