Standard Practices for Overdraft Fees

Jeffrey Douglas Kaliel, a Washington, DC attorney, is known for his work on class-action litigation lawsuits concerning the banking industry. Recently, Jeffrey Douglas Kaliel and his firm have been involved in assisting Virginia residents with recovering bank fees that they were incorrectly assessed.

Unlike his previous cases, these new cases involve credit unions. Credit unions have typically been seen as more consumer-friendly alternatives to traditional banking. However, some of these institutions were found to have engaged in predatory practices including charging multiple fees on the same transaction. Other practices include not processing transactions in the order that they were made to maximize the amount of money they could make on fees.

While credit unions do have the right to set fee policies, consumers are protected through precedence and legislation from predatory banking policies. For example, credit unions can charge a fee on a check that results in the account being overdrawn. The credit union pays the amount to the vendor, but the account holder is responsible for both the fee and the amount on the check. Moreover, they can assess more than one overdraft fee in a single day.

With debit and ATM cards, the rule is slightly different. The credit union cannot charge an account holder a fee unless that person has opted in. In a case that a debit card has been made when there are insufficient funds, the bank will pay the vendor and assess the account holder the fee and the amount charged to the card. If the person does not opt-in, they cannot spend more than is in the account because the card will be declined without a fee assessment.