A number of banks have been sued recently for charging multiple non-sufficient funds fees on a single item. In this case, the complaint alleges that it’s Alaska USA Federal Credit Union that has been charging the multiple fees.
The class for this action is all Alaska USA checking account holders who, during the applicable statute of limitations, were charged more than one NSF fee on the same item.
Alaska USA’s Account Documents allow it to deal in two ways with an Automated Clearinghouse (ACH) transfer (an electronic funds transaction) when there is not enough money in the customer’s account. It may choose to pay the transaction, in which case it charges the customer an overdraft fee of $25. Alternatively, it may choose to reject the transaction, in which case it charges the customer an NSF fee of $25.
According to the complaint, the Account Documents provide for only a single such overdraft or NSF fee on an item. However, Alaska USA sometimes charges customers more than one such fee.
On November 15, 2018, plaintiff Christine Coleman tried to make a payment to Safeway of $61.57. Because she did not have that amount in her account, Alaska USA rejected the transaction and charged her $25. This fee is not at issue in this case, as it is permitted by the Account Documents.
However, without any request from Coleman, Alaska USA tried to process the transaction again eleven days later, on November 26. It tried the transaction again, again found insufficient funds in the account, and again charged Coleman a $25 fee. The complaint alleges that the unpaid item was still the same item and that Alaska USA’s Account Documents does not allow for two such fees on the same item.
The complaint argues, “The same ‘item’ on an account cannot conceivably become a new one each time it is rejected for payment and then reprocessed, especially when—as here—[Coleman] took no action to resubmit it.”
While Alaska USA is not the only financial institution to charge such extra fees, others who do it warn customers in their account documents. The complaint quotes from the documents of other institutions to demonstrate this.
For example, the Deposit Account Agreement of First Citizens Bank in the Carolinas as saying, “Because we may charge a service fee for an NSF item each time it is presented, we may charge you more than one service fee for any given item.”
The complaint alleges that the multiple charges violate Alaska USA’s duty of good faith and fair dealing, among other things.