Class-Action Lawsuit Against Bank for Overdraft Fees
A billion-dollar bank in the US is facing a potential class-action lawsuit for the second time in about three years over allegedly imposing “crippling” overdraft fees on customers.
Allegations Made by Customers
The lawsuit has been filed by customers LaNita Criswell and LaSheena Neal against Frost Bank. They claim that the bank has been charging $35 overdraft fees on transactions that do not exceed account balances, which they believe is a breach of contract and a violation of the Electronic Funds Transfer Act.
– Criswell and Neal are seeking $5 million in damages on behalf of at least 100 members in the proposed class-action lawsuit.
– Customers allege that despite having enough funds to cover a purchase, Frost Bank still applies $35 overdraft fees and misrepresents its practices in account contracts.
Response from Frost Bank
Frost Bank claims that it removed the fees in question last summer. The Consumer Financial Protection Bureau (CFPB) has also proposed a rule to address similar “junk fees” imposed by banks.
– Previous lawsuit in 2021 alleging unfair collection of overdraft fees was settled and dismissed in August 2022.
– Frost Bank extended its $100 overdraft grace period to protect customers from fees if they overdraw their accounts by up to $100.
Bank’s Discretionary Feature
Frost Bank mentions that the $100 overdraft grace period is a discretionary service. The bank reserves the right not to pay items in cases where accounts have questionable standings or a history of excessive overdrafts or irregular deposits.
– Frost Bank is one of the largest 50 banks in the US with $50.8 billion in total assets and over 5,000 employees.
Closing Subheaded – Hot Take
A class-action lawsuit is being pursued against a US billion-dollar bank for allegedly charging excessive overdraft fees to customers. The bank claims to have revised its fee policies and has extended an overdraft grace period to prevent customers from incurring additional charges. However, customers remain dissatisfied with the bank’s practices and are seeking substantial damages through the lawsuit. The outcome of this legal action could have significant implications for Frost Bank and its customers.
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