Overdraft vs. NSF Fees
There are a number of different ways in which banks and credit unions can can charge customers excessive fees. It is important to understand the difference between these fees in evaluating whether or not these charges are fair and legal.
If you don’t have enough money in your account to cover a transaction, but your bank pays the transaction anyway, your account has been overdrafted. Overdrawing your account can happen through the processing of checks, ATM transactions and withdrawals, debit card purchases, and automatic payments.
Your bank may offer overdraft protection, which means that if you do not have enough money in your account, the bank or credit union will most likely pay the transaction for you, and charge you a fee. Your bank may also cover your transaction through a transfer of funds from a line of credit, credit card, or other linked account. The customer generally has to opt into overdraft protection in order for this to occur.
These fees can often be rather high and confusing, and can add onto the burden of having to repay the overdrafted amount. If you feel as though you were wrongfully or excessively charged overdraft fees, speak to an experienced attorney and gain a comprehensive evaluation of your claims.
Non-sufficient Funds Fees
You may be charged a non-sufficient funds (or NSF) fee if your check or electronic payment is not paid in full due to a lack of funds in your account, often resulting in what is known as a “bounced” check. This means that your bank denies your transaction, and charges you a fee for doing so. While this seems rather straightforward, there have been reports of banks charging multiple NSF fees for a single transaction. If you feel as though you are being charged excessive NSF fees, speak with a financial fraud lawyer to discuss your options.
Intra-Bank Transfer Fees
It is not uncommon for individuals to have multiple accounts (such as a checking and a savings account) with one bank. If you tried to transfer between your accounts at a single bank, and overdrew your account as a result, triggering an overdraft fee, speak with a lawyer today. You may be eligible to recover this intra-bank transfer fee.