Pinnacle's Overdraft Fees Spur Lawsuit
December 15, 2011
A Pinnacle Bank customer who claims the bank tweaked overdraft charges to
maximize the amount of fees collected is pursuing legal action to refund his and
all Pinnacle customers' overdraft charges over the past few years. The bank
shuffled transactions to process the largest ones first, instead of charging
customers in chronological order, so that their accounts were depleted more
quickly and charged more overdraft fees, according to the lawsuit. The bank
automatically enrolled customers in a program that would allow debit card
purchases to go through when customer accounts were empty, triggering a $36 fee
for each purchase after a customer's available funds were depleted. Since the
passage of new banking regulations in July 2010, however, banks, must give
customers the choice to opt in to overdraft protection programs. Pinnacle has
called its program "Overdraft Privilege." "In many instances, these overdraft
fees cost Pinnacle account holders hundreds of dollars in a matter of days, or
even hours, when they may be overdrawn by only a few dollars," the suit states.
A similar lawsuit was settled in federal court in late November in which the
Associated Bank of Green Bay, Wis., agreed to pay $13 million to customers who
were illegally charged egregious overdraft fees.
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