Debit Card Overdraft Fees On the Increase

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A few years ago, if you tried to use your debit card and had insufficient funds in your bank account, the transaction would be denied. Eventually, banks realized that allowing the transactions to go through and charging overdraft fees for the transactions could generate enormous fees. To increase such fees even more, banks typically put through the charges in decreasing order.

Ralph Tornes, who lives in Florida, is pursuing a lawsuit against Bank of America for charging him nearly $500 in overdraft fees in 2008 after it rearranged his purchases from largest to smallest. In May 2008, for instance, Mr. Tornes had $195 in his account when he made two debit purchases for $8 and $13; the bank also processed a bill payment of $256. He claims that Bank of America took his purchases out of chronological order and ran the biggest one through first. So instead of paying $35 for one overdraft fee, he was stuck with three, for a total of $105.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Robert Kraft, Kraft & Associates | Attorney Advertising

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