Pinnacle's Overdraft Fees Spur Lawsuit

Tennessean
December 15, 2011
Allyn, Bobby

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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