The plaintiffs in this class action, James and Darryl Ellis, previously filed a class action against their new mortgage servicer for making mortgage deductions on the wrong days, causing them financial difficulties and costing them overdraft fees. Now, they bring suit under the Electronic Funds Transfer Act (EFTA) against JPMorgan Chase Bank, NA, the bank that permitted the incorrect withdrawals from their account and then charged them overdraft fees.
The Ellises bought their home in Brown Deer, Wisconsin in August 2016. Not long after they closed, the servicing of the loan was transferred to Pacific Union Financial, LLC (PUF).
Shortly after that, the Ellises asked PUF to set up bi-weekly mortgage payments, in which half of the monthly mortgage amount would be debited from their Chase bank account every two weeks. The arrangement began in December 2016. This preauthorized electronic fund transfer of $712.56 took place on alternate Fridays.
On February 8, 2019, Nationstar Mortgage notified the Ellises that it had taken over the servicing of their mortgage. No change was made or proposed to the bi-weekly payment arrangement, which had been in operation for more than two years.
The Ellises’ next payment was to be February 15. Instead, Nationstar debited their account for the payment on February 11. This early debiting caused their account to be overdrawn, for which Chase charged them a $34 overdraft fee.
The complaint alleges that Chase did not have authorization to make the February 11 transfer; the only authorized transfer was the existing one with PUF, which did not include a February 11 transfer.
Nationstar made two other incorrect transfers, one (schedule for March 15) on March 18, and another (scheduled for March 29) on April 1. Neither created an overdraft. However, on April 2, Chase permitted another transfer, this time for $1,469.77.
This unexpected transfer caused three $34 overdraft fees. When Mr. Ellis complained, Nationstar refunded just half the wrongly-transferred amount, $770.00, plus one $34 overdraft fee. The complaint alleges that Chase should never have made the transfer, which was not authorized, and should not have billed them for subsequent overdraft fees.
Also, the complaint alleges that “it appears that [Chase] reordered the transactions of April 2, 2019 so that [Chase] could impose two improper overdrafts instead of one.”
Class I for this action is (a) all natural persons in the US (b) whose mortgage servicing rights were transferred to Nationstar (c) and who had an electronic funds transfer authorization with the prior servicer, (d) and from whom Chase made electronic funds transfers that were not in keeping with that existing electronic funds transfer authorization. There is also a Wisconsin Subclass.