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BB&T Refusal to Block Predatory Loan Payments EFTA Class Action

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Christine and Ronnie Gillam took out loans, and, according to the complaint for this class action, and were required as part of the loan agreement to permit automatic transfer payments from their BB&T bank account. When they learned that the loans were predatory and illegal under the laws of their state, Virginia, they attempted to stop the payments, but BB&T made the payments anyway—and, the complaint claims charged them overdraft fees for the payments as well.  

The classes for this action include the following:

  • All persons who (a) have accounts with BB&T and (b) notified BB&T that a preauthorization on the account had been revoked, between October 27, 2016 and October 27, 2017.
  • All persons who (a) have accounts with BB&T and (b) who, between October 27, 2016 and October 27, 2017, notified BB&T to stop payment on a preauthorized electronic funds transfer orally or in writing at least three business days before the date of the scheduled transfer.
  • All persons who (a) have accounts with BB&T and (b) who, between October 27, 2016 and October 27, 2017, notified BB&T to stop payment on a preauthorized electronic funds transfer orally or in writing at least three business days before the date of the scheduled transfer, and (c) BB&T failed to stop the payment as instructed.

The complaint alleges that the payments were made in violation of the Electronic Funds Transfer Act (EFTA) and thus not valid. The EFTA says that consumers may stop payment on a preauthorized transfer by notifying their financial institutions “either orally or in writing up to 3 business days before the scheduled date of transfer.”

According to the complaint, the Consumer Financial Protection Bureau (CFPB), which has supervisory powers over various federal consumer financial laws, including the EFTA, says that once a financial institution has been notified that the preauthorization is no longer valid, the financial institution—which works for the account holder—is liable for any subsequent payments. The CFPB has on its website an article about how to properly revoke preauthorization as well as form letters consumers may use to notify their banks of the revocation.

The complaint says that Ms. Gillam sent BB&T an e-mail with an attached letter based on the CFPB form letter, but that BB&T required them to submit a BB&T Stop Payment Request, but warned, “There is no guarantee a ACH Stop Payment will stop the payment from posting to your account as the transaction is electronic.” Ms. Gillam then called, but BB&T told her that her only two options were to close her account or give BB&T a Stop Payment order, so the Gillams did in fact provide the bank with a Stop Payment order.

BB&T then charged the Gillams $70 in stop payment fees plus two $2 phone charges—and, the complaint claims, they then let the payment transfers go through anyway. In addition, the complaint claims, BB&T charged the Gillams eleven overdraft fees, at $36 each, plus a $36 returned item fee.

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