Friday, March 25, 2016

NASA FCU Sued over Overdraft Fee Program

NASA Federal Credit Union (NFCU) of Upper Marlboro, Maryland is being sued over its overdraft fee program.

According to the November 17, 2015 complaint, NFCU charged overdraft fees for transactions for which there was money in the checking account to cover the transactions, thereby breaching the express terms of its consumer contract.

The Plaintiff -- Mary Chambers -- also alleges that because the credit union provided inaccurate and misleading overdraft information to its customers, under the Electronic Funds Transfer Act, 12 C.F.R. § 1005, NFCU was not authorized to assess overdraft fees to consumers for debit card and non-recurring debit card charges. However, NFCU did charge its customers overdraft fees for ATM and debit card charges.

The lawsuit claims that NFCU's contractual promises in the Account Agreement and Opt-In Agreement to only assess overdraft fees when there is not enough money/sufficient funds in the account to pay the item. However, NFCU's practice when assessing an overdraft fee on a transaction is to ignore whether there is money in the account or a negative balance, and instead make the automated decision on assessing overdraft fees based on an artificial internal calculation (available balance) rather than the actual balance.

For example, the Plaintiff claims that on March 20, 2015, she had a balance of $67.74 in her account, when a debit card transaction of $59.99 was posted leaving her with a balance of $7.75. Despite have sufficient funds and money in her account to cover and pay the $59.99 transaction, she was charged a $32.00 overdraft fee by the credit union.

The complaint further alleges that charging overdraft fees on accounts that had sufficient funds to cover the charges caused additional overdraft fees to be assessed.

The complaint is seeking class certification and demanding a jury trial.

Read the complaint.

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