This is one of a number of class actions filed this year against financial institutions for charging more than one non-sufficient funds (NSF) fee on a single item. In this case, the City National Bank of West Virginia is accused of charging as many as five on a single item.
The class for this action is all persons who, within the statutes of limitations period, were charged more than one NSF fee for a single transaction in a City National checking account.
When a consumer tries to make a debit card or electronic payment and does not have funds to cover it on account, the financial institution has two options. One is to pay the transaction, creating an overdraft. In this case, the institution will charge an overdraft fee. The other option is to refuse the transaction. In this case, the institution may charge an NSF fee.
The complaint does not take issue with this practice. The problem occurs when the institution decides, on its own, to retry the transaction in an account that still does not have sufficient funds and to charge another NSF fee for the same transaction, even though the account holder has not asked for the transaction again.
In this case, in July 2018, plaintiff Brenda C. Noe tried to make an electronic payment for $52.10 to Cashland. City National rejected the transaction, because she did not have that amount in her account, and charged her a $36 NSF.
She did not ask City National to try the transaction again. However, weeks later, on August 8, City National decided, on its own, to try to make the payment a second time. Again, Noe’s account did not have the funds to process the transaction. City National then charged her a second $36 NSF fee.
Then, on August 22, City National decided again to retry the payment, and the result was the same. It rejected its own request and charged Noe another $36 fee. At this point, the bank had charged her more than double the value of the original transaction with its $108 in fees.
On May 6, 2019, Noe tried to pay Walmart $25.13. She did not have that amount in her account, so City National refused the transaction and charged her a $36 NSF fee. This time, however, the bank retried the transaction another four times, in the end charged her five NSF fees, for a charge of $180 for a single $25.13 transaction she only requested once.
The bank’s Terms and Conditions for Noe’s account and the information on its website speak of charging for a transaction in the singular. For example, the website says, “If you write a check or make a recurring payment for more money than you have in your account, City will return the item unpaid and a $36 NSF fee will be assessed against your account.”
The complaint alleges breach of contract and of the covenant of good faith and fair dealing, along with unjust enrichment.