When you open a checking account with a major U.S. bank you are usually offered a debit card to use at ATM machines for cash withdrawals as well as goods and service purchases. With this convenience of automatically withdrawing funds from your bank account comes the issue of overdrafting your bank account.

In recent years, banks have been found to have altered the order in which debit purchases are paid out to cause users to incur more overdraft fees. These unscrupulous listing policies have been made public and several class action lawsuits have been filed against major banks. If you feel you have been unfairly hit with overdraft fees you should speak to a Louisville class action lawyer to see if there is a class action lawsuit you may be eligible to participate in.

How are overdraft fees assessed and processed?

In a typical scenario, when you use your debit card at a point of sale to purchase goods or services and there are insufficient funds in your checking account, you will incur an overdraft fee. The bank will allow the transaction, but not only will your account be debited the amount of the sale, an additional fee will also be added on. The overdraft fee is normally $35 for most banks, but may vary for certain account types.

There is no limit to how small the overdraft amount can be, so a $2 purchase when you do not have that $2 in your bank account may actually cost you $37 after overdraft fees. Most banks do not alert you in any way that you are overdrafting your account, and an afternoon of debit card purchases may cost you hundreds in overdraft fees by the end of the day.

Banks also do not always record debit card purchases in the chronological order they are made. If you buy a coffee and donut in the morning and go to the grocery store later in the day, the grocery charge will most likely be deducted from your account first, because banks often post the larger amounts charged first. This usually results in more overdraft fees made per day, as most debit card users do not check their bank balance multiple times per day.

The timing at which banks decide to deduct the funds from your bank account has led to many customers alleging that the bank's practices caused them to incur more overdraft fees than they should have. In these cases, a Louisville class action lawyer may be able to help you seek compensation for these unfair fees.

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Matthew L. White
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Founder & Partner of Louisville Personal Injury Law Firm Gray & White Law

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