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Investigation of Bank Non-Sufficient Fund Fees on Retried Transactions

ATM Screen Announcing Non-Sufficient Funds

Has your bank charged you more than one non-sufficient funds (NSF) fee on the same item? Did the bank refuse a transaction, charge you for not having enough money in your account, then try the transaction again on its own—and charge you for it again? 

This situation has been occurring more frequently with banks that charge NSF fees, and it’s begun to anger customers, particularly when the NSF fees are larger than the rejected item. After all, doesn’t the bank know how much money you have in your account? Why retry a transaction when the money isn’t there? And why should you pay another fee when you didn’t ask them to retry it? 

We’re investigating to see if a class action is needed. 

The fees in question are not overdraft fees, where your account doesn’t have the money, the bank pays for the transaction anyway, and then it charges you extra for covering the overdraft. No, these are transactions where the bank refuses to pay for the transaction, then it charges you for even having tried. And later it tries the transaction again on your behalf—and charges you again. 

For example, a man named Troy Howard tried to use his debit card for an Uber fare of $13.16. His account did not have the funds, so his bank, First Third Bank, refused to pay and charged him $37 for attempting the transaction. In that situation, most people will have to find another means of paying the Uber charge, perhaps with cash or a credit card. In any case, Howard did not retry the transaction—but seven days later, Fifth Third did: It once again tried to debit Howard’s account for $13.16 to pay Uber. Once again, the account did not have the money and Fifth Third charged Howard another $37 fee. About another week later, the bank tried the transaction a third time, charging him a third fee, for a total of $111 in fees on a charge of just over $13. 

Howard has since sued Firth Third Bank, for that and other practices, and he’s not the only one to object to this practice of retrying transactions without customer consent. 

Wells Fargo has been sued for retrying transactions. In this case, Wells Fargo refused the transactions once, charged the NSF fees, retried them days later, then paid them and charged an overdraft fee. (So why not pay them on the first try?) And Target has issued a supposed “debit card” that retries transactions. In that case, Target charges a fee for the rejected transaction, but so does the bank its debit card connects to, resulting in two fees for the same rejected transaction, as well as fees for retrying it.

If you’re being charged NSF fees for a transaction the bank has retried on your behalf, we’d like to hear from you. Fill out the form on this page and let us know about your experience.

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