Atlantic Union Bank illegally enrolled thousands of customers in checking account overdraft programs by phone and failed to provide proper disclosures, a federal agency said Friday as it took action against the bank.
The Consumer Financial Protection Bureau is ordering Atlantic Union to refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund.
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said in a statement.
As of March 31, Atlantic Union, which has branches throughout Virginia and in portions of Maryland and North Carolina, had more than $20 billion in total assets.
Federal law requires banks to describe their overdraft service in writing before getting a consumer to opt-in to overdraft coverage for ATM withdrawals and one-time debit card transactions.
The bank violated federal law by:
- Charging fees without consent: At Atlantic Union Bank branches, employees gave oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts. Employees sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures.
- Misleading customers about the terms and costs of overdraft coverage: For customers who enrolled in overdraft coverage by phone, Atlantic Union Bank employees didn’t clearly explain which transactions were covered by the service, and made other misleading statements about the terms and conditions of the service. In some calls, bank employees also omitted key information about the cost of the service and the fact that consumers could incur a hefty overdraft fee for each transaction covered by the service.
So be careful when dealing with banks. Consider finding a local credit union instead.
Whatever financial institution you choose, compare prices for overdraft fees. Some charge no or low fees.
Unsuprising that this happens over & over again given that a majority of the US Supreme Court justices upended 60 years of precedent by deciding that mandatory arbitration clauses plus waiver of right to participate in class actions is JUST FINE in corporate/”consumer” transactions. Which means that pretty much every “contract” you sign, for a credit card, to for example, purchase something online from Macy’s, your cell service contract, etc, will include those clauses. Historically class actions were how large groups of people/plaintiffs could right such wrongs as you’ve posted about. No more. Now you have to rely on underfunded federal agencies all to vulnerable to lobbying of Congressional members to decrease what power/authority they have to assist “consumers”, i.e, non wealthy people, or simply to underfund those agencies (easy to say “gov’t doesn’t work” when you’ve made sure it’s so underfunded it can’t perform duties/work assigned to it by statute or legislation). Prior to the creation of the very very pro corporate majority, such clauses occurred only in business to business contracts. Still some possibility of abuse, but less likely.
Some of the clauses allow claims to be filed in small claims court–imo, that happened because corporations want to be able to sue “consumers” in small claims court, it’s cheaper if it’s a relatively “small” amount. Maybe not small to the alleged debtor, but to the megacorp. Or the bank. Never hear the so-called “populists” of the GOP talk about how much power corporations have wielded (more & more) in the US (gotten far worse since US S.Ct decision in Citizens United) and use it to make the economic relationship between corporations and individuals more & more unequal. And increase the gap between ultra wealthy & almost everyone else in the US. As some have said, welcome to the 2nd Gilded Age in the US (Robert Reich & others).
Yes, that’s why I write about the wrongdoing by big banks. As you said this is happening over and over again. Check out your local credit union, I always advise.