Bank Overdraft Fees
Bank overdraft fees are standard practice for banks—and a great source for profit. Many banks assess fees for going over the bank account balance. Some estimates state that the banking industry has made over $35 billion off of customers in the last year. Among the banks facing lawsuits are Sovereign Bank, Wells Fargo, Bank of America, M&T Bank and Wachovia. These companies are being accused of charging unreasonable fees when customer balances fell below a minimum balance. They are also being accused of manipulating deposits and charges to overdraft the account and recover fees. Some banks will charge the larger amounts first to exhaust the account and thus be able to charge multiple overdraft fees. For example, some consumers noted situations where they would pay their rent and purchase lunch and coffee in the same day, but the rent would be processed first and then there would be a charge for the two other purchases, resulting in increased fees.
Wells Fargo was recently denied review by the United States Supreme Court in its 2010 case mandating that it pay more than $200 million for manipulating debit card purchases to increase its fee revenue in violation of California law. Other cases are ongoing with settlements in the millions for a large number of consumers.