FT. WORTH, Texas–American Airlines FCU has asked a federal court to give preliminary approval to its proposal to pay $1.8 million to settle a class-action lawsuit against it over its overdraft practices.
The settlement involved a proposed class of approximately 26,800 members, according to court documents. The $9-billion credit union has approximately 314,000 members overall.
Similar to litigation that has been filed against other credit unions by firms that specialize in the lawsuits, the action against American Airlines Credit Union alleged it improperly charged members overdraft and non-sufficient fund fees.
Under the proposed settlement filed with a court in California, AACU would pay $1.59 million to plaintiffs in the case, and would also waive approximately $176,000 in uncollected NSF fees.
The litigation goes back several years. As early as 2017 at least one law firm was online seeking plaintiffs in the case.
“Legally, financial institutions like American Airlines Credit Union must allow customers to opt into these overdraft programs before charging overdraft fees,” read a notice on topclassactions.com in 2017. “Some financial institutions may even be charging excessive overdraft fees.”
What Site Stated
At that time, the website stated, American Airlines Credit Union offers a “standard” overdraft protection program called Bounce Protection, as well as an “enhanced” overdraft protection program called Bounce Protection Plus.
“According to the side-by-side comparison on the American Airlines Credit Union site, Bounce Protection is included with a debit card account,” read the online notice. “Overdraft fees through this program are $25 per overdraft item. Bounce Protection Plus is listed as an “opt-in” feature that covers more types of overdraft problems, including debit card signature, PIN, and ATM rejections. But consumers say any type of overdraft protection program should be opt-in.”
The notice seeking plaintiffs was similar to other notices targeting different financial institutions, including credit unions, over their overdraft practices.