This appears to be perfect timing for a lawsuit seeking class action status over a bank’s overdraft fee practices.
After weeks of buzz surrounding bank fees, primarily triggered by two of the nations largest banks (Bank of America and Wells Fargo) going public with the intent to impose fees for simply using your debit card, a popular bank in the west, Zions Bank, is now being sued for it’s underhanded overdraft fee system.
Allegations Against Zions Bank (Salt Lake City, Utah):
- Customer claims Zions Bank makes it nearly impossible to avoid their overdraft fees.
- Customer claims Zions Bank manipulates order of debit postings to maximize overdraft fee potential.
- Customer claims Zions Bank does NOT regularly deny attempted charges to their debit cards when bank account is close to or below zero.
- Melinda Barlow, the customer initiating this class actions lawsuit, claims she was hit with overdraft fees totaling up to $100 in one day in ’09.
- Customer also claims Zions Bank posts debit transactions ahead of deposits in an attempt to capitalize on more overdraft fees.
Overdraft Fee Practice and Litigation:
As an industry banks collected roughly $40 billion per year in overdraft fees alone before July of 2010. During this month legislation was passed which required banks to seek the permission of their customers to enroll them in overdraft protection programs. When the customer enrolled, this would eliminate, among other things, the possibility of charging a purchase with your debit card without sufficient funds in your account.
Because of the recent increase in bank fees by the nations largest retail banks, it’s been suggested both in the media and here at BankVibe.com that many consumers have begun a migration towards credit unions as an alternative. Since credit unions are not-for-profit institutions, they do not engage in profit maximizing efforts. Profits rendered from these institutions are regularly returned to the members in the form of better rates and lower fees.
Roughly 35 class action suits have sprung up around the country centered on a malpractice of overdraft fees since 2010 implicating some of the nations most well known banks including: JP Morgan Chase, Regions Bank, U.S. Bankcorp and BB&T Corp.