If your bank refuses a checking account request and charges you $25 for non-sufficient funds, should it be able to charge you again for the same check or transaction? Many class actions have been filed on this topic lately. This time it’s Ally Bank that is alleged to be unfairly charging multiple non-sufficient funds (NSF) fees on the same checking account item involving an Automated Clearing House (ACH) debit request.
The class for this action is all Ally savings and checking account holders in the US who, during the statute of limitations, were charged more than one NSF fee for the same item.
When a bank receives a request to pay a transaction and the account does not have sufficient funds, it has two options: to pay it and charge an overdraft fee, or to reject it, in which case it may or may not charge an NSF fee.
Ally is permitted to charge customers NSF fees. Three Ally documents permit it: “Straight Talk Product Guide: Your Interest Checking Account” (including its Checking Fee Schedule); Straight Talk Product Guide: Your Online Savings Account (including its Savings Fee Schedule); and “Deposit Agreement and Disclosures.”
The complaint does not dispute its right to one NSF fee per transaction request. The problem occurs when Ally tries to process the transaction again. The complaint points out that “upon information and belief, Ally’s own bank statements refer to the re-attempted items as ‘RETRY PYMT’—i.e., mere iterations of the same initial items” rather than listing them as new items.
In fact, the fee schedules say “We won’t charge you an additional fee even if you have a negative account balance over an extended period.”
Plaintiff Christopher Coleman tried to make an ACH payment of $28.02 on December 19, 2018. Ally rejected the payment and charged him $25.
Just over a week later, on December 27, 2018, Ally reprocessed the item for payment, without any request from Coleman to do so; again, Ally rejected it and charged Colemen $25.
Roughly a week after that, the same item was reprocessed for payment on Ally’s own initiative, and for a third time, Ally charged Coleman $25.
By that time, Ally had charged a total of $75 to refuse the same $28.02 payment three times.
The complaint contends that “the same instruction for payment on an account cannot conceivably become a new ‘Overdraft Item’ each time it is rejected for payment then reprocessed, especially when—as here—[Coleman] did not ask Ally to resubmit it.”
The complaint alleges that most banks do not charge customers for multiple reprocessing attempts, but that those that do at least disclose it in their various agreements.