According to a recently completed class action lawsuit filed against the Community Bank by the Class Action Lawsuit Fund, most of the big financial corporations are in the habit of illegally charging the consumers for overdraft services. It has also recently been claimed that even if the consumers have enough funds in their bank accounts for paying the charges, the overdraft charges are still being charged. So, what is the main reason behind this kind of behavior on the part of banks and financial companies? What are the reasons that have made banks resort to such unfair and unjust practices? Well, here are some of the reasons:
Banks often are charging late fees and overdraft fees for not carrying adequate funds in one’s bank account. The excuse given by banks is that they are following the guidelines of the Federal Reserve System. According to the Federal Reserve System, all financial institutions including banks must charge reasonable overdraft and late fee charges only to their customers who have made prior deposits for purchasing checks or debit card transactions. Even though the Federal Reserve System’s guidelines may seem fair to ordinary customers, banks tend to circumvent the rules once they receive settlements or judgment from their customers in a lawsuit. It is due to this reason that a large number of people have filed lawsuits against their banks overcharging of overdraft and late fees.
Another reason that has encouraged banks to use unfair practices in collecting overdraft fees is that the government has not come up with a way of improving the economy and has not found an alternative method for solving the economic problems of credit holders. Therefore, the banks cannot expect the final approval for their actions by the class action settlement lawyers. Once the final approval hearing is over, the class members will have no other option left with which will allow them to escape the charges. Many of the banks have resorted to deceiving their customers regarding the status of their accounts. Most of the customer did not know that their accounts had been frozen and hence they were unaware of their rights.
20 A customer is presumed to know the status of his account until the final approval hearing. If the customer had knowledge of that freeze, he could have informed the bank that he would be putting the matter before the final approval hearing. However, most of the case files were never presented before the final approval hearing as the customer was under the impression that the account credit had been frozen.
21 The bank has not waived its legal rights of pursuing the account credit lawsuit if the customer has provided any clarification to the bank regarding the frozen account. The bank is liable to the customer for the costs incurred in presenting the case to the courts and the damages awarded to the person who had been a victim of the bank’s wrongful actions.
Charges in the form of penalty fees, interest rate hikes, account closing fees, legal costs, and so forth are all lawful charges in any lawsuit. Any company who violates the law by charging illegal overdraft fees or by charging an unreasonable fee is guilty of wire fraud. This crime can bring the defendant in a financial ruin and the lawsuit can be recovered by the victims. In order to avoid such unpleasant consequences, it is best to seek legal counsel from specialized litigation funding companies.
There are many class action lawsuits in the United States. The plaintiff in such cases pays money to obtain relief from liability. This money is recovered through court awards. The process of recovering the money and putting the case behind bars depends on each individual case. Some plaintiffs have little to nothing to put forward in their defense while others have large sums of cash to leverage in their favor.
One popular class action lawsuit is one charging card issuers for charging illegal overdraft fees. Banks and credit card companies are often willing to settle out of court with plaintiffs who can show that they have been overcharged or that they suffered a financial loss because of bank mismanagement. When the banks try to avoid court, they can resort to making deals that are not in their best interest. Negotiations usually involve a settlement that involves some percentage of the actual amount owed. A class action lawsuit that recovering a large sum of money can make it more difficult for the bank to charge cardholders; therefore, it should never be left to the victim to settle for a Settlement in full, even if it means pursuing the bank to the very end to recover the debt.