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US Bank has been hit with a class action lawsuit  alleging it routinely assesses overdraft charges even when an account has sufficient funds to cover the transaction.

Plaintiff Reyna McGovern filed the US Bank Overdraft Charges class action lawsuit claiming she was and other consumers were assessed two out-of-network ATM fees (OON fees) on out-of-network ATM withdrawals preceded by a balance inquiry. Additionally, McGovern says US Bank assesses overdraft fees on transactions that did not actually overdraw the account.

It’s important to note that this lawsuit isn’t challenging US Bank’s right to charge an OON Fee, but instead challenges US Bank’s imposition of two OON Fees on the same transaction. Specifically, the US Bank account holders check their account balance prior to withdrawing funds at an out-of-network ATM, US Ban charges two OON fees – one for the balance inquiry and one for the withdrawal.

“US Bank’s uniform practice of charging two OON Fees per cash withdrawal preceded by a balance inquiry is unfair and deceptive, violates representations in US Bank’s account documents, and constitutes a breach of contract. Indeed, US Bank’s account documents fail to provide notice of the possibility of being charged two fees by US Bank during one transaction at an out of network ATM.”

According to McGovern, there is no justification for these practices, other than to maximize US Bank’s overdraft fee revenue. She shares that on May 20, 2018, she withdrew $20 in cash from an out-of-network ATM at a CVS store in San Diego. Following her transaction, McGovern was surprised to learn that she was assessed, in addition to the cash withdrawal surcharge paid to the out-of-network ATM provider ($2.95), a separate $2.50 fee from US Bank for making an out-of-network balance inquiry, and an additional $2.50 fee from US Bank for making an out-of-network cash withdrawal. In total, US Bank charged McGovern two OON Fees of $2.50 each—one for the withdrawal and one for the “balance inquiry.”

McGovern says would not have checked her balance prior to withdrawing funds at the out-of-network ATM had she known she would be charged two OON Fees by US Bank for doing so.

Additionally, the US Bank Overdraft Charges class action lawsuit asserts that at the moment debit card transactions are authorized on an account with sufficient funds to cover the transaction, US Bank immediately makes an internal notation deducting the amount from the account and purportedly sets aside the funds to cover that specific transaction. As a result, customers’ accounts always have sufficient available funds to cover these transactions throughout their entire lifecycle. However, US Bank still assesses $36 Overdraft fee on many of these transactions, in violation of its contractual promises not to do so.

“Despite purporting to put aside sufficient available funds for debit card transactions, US Bank charges overdraft fees on those same transactions if they settle—days later—against a negative balance. By this manipulation, US Bank turns one potential overdraft into several.”

McGovern is seeking to represent a proposed Class of “all US Bank checking account holders in California who within the applicable statute of limitations were assessed an OON Fee for a balance inquiry at an out-of-network ATM when the balance inquiry was made in conjunction with a withdrawal.” She is asking the court to award restitution of all relevant OON fees and all overdraft fees paid to US Bank by herself and the proposed Class, along with statutory, punitive and exemplary damages.

McGovern and the proposed Class are represented by Todd Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLC; Jeffrey Kaliel and Sophia Goren Gold of Kaliel PLLC; and Hassan Zavareei of Tycko & Zavareei LLP.

The US Bank Overdraft Fees Class Action Lawsuit is McGovern v. US Bank, NA, Case No. 18-cv-1794-CAB-JMA, in the U.S. District Court for the Southern District of California.

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