Alleging UMB Bank “unfairly manipulated transactions to generate more overdraft fees,” a Missouri man is now plaintiff in a class action lawsuit against the bank. The lawsuit alleges that David Johnson, plaintiff, had $819.67 in his account on a Friday in June of 2009. He made $697.93 worth of debit card purchases over the weekend, and even made a deposit of $94.00. But by Monday, Johnson had incurred $612.00 worth of overdraft fees for 17 transactions, some as low as 85 Cents.
Johnson’s suit alleges the bank manipulates transactions and account balances in order to push the account into overdraft status. He claims the bank violated the terms of its own contract, violated Missouri consumer law banning unfair and deceptive practices, and was unjustly enriched by its policies.
Johnson is not alone, a federal lawsuit against Wells Fargo went to trial last Friday, and will test the viability of claims against the bank based on California law. Several other class-actions against multiple banks were consolidated into one case in Florida before the California case went to trial.
In March, Bank of America announced it would stop ordering transactions so that large amounts are ordered first. This practice is also alleged in the Missouri and California cases and occurs when banks order multiple transactions, not by time, but by dollar amount, so that the customer’s account is depleted faster.
Unfortunately, the economic downturn has really made people look up and see where they’re money is going. Banks have been using these tactics for years, with little complaint. People complain about greedy plaintiff’s lawyers but nothing else has stopped this practice. Federal lawmakers have discussed reform, but nothing has gone through. I also believe State’s Attorneys Generals should have been involved in protecting consumers against these kinds of practices, but nothing has been done in that arena either.
If you are unhappy with your bank, shop around. Find a bank that is clear about their overdraft fees or even find one that doesn’t have overdraft fees at all. This will really have effect on the system more so that lawsuits or new legislation.