In the lawsuit, customers alleged Bank of the West manipulated the sequence in which customers’ debit card transaction were posted to reduce their account funds so the bank could charge overdraft fees. The class action lawsuit included Bank of the West customers who had been charged overdraft fees between June 2005 to July 2011 as a result of the bank’s alleged practice of rearranging debit card transactions,
Among the latest complaints are allegations that Bank of The West prioritizes the clearance and posting of checks so that accounts go into default and can then be subject to overdraft fees.
Overdraft fees are charged when customers attempt to conduct a transaction from their bank account that they do not have the financial means to cover.
Bank accounts go into overdraft when more money has been taken out of the account than was actually in it. It can happen quite easily: a bank account has $100 in it, but the customer makes a debit card purchase for $110, pushing the account $10 into overdraft.
Consumer Financial Protection Bureau reported in 2013 that 61 percent of bank profits from consumers come from overdraft and insufficient fund fees.