COLORADO SPRINGS, Colo.–Ent Credit Union has reached a settlement in a class action lawsuit over its overdraft fee practices. Ent CU is one of numerous CUs across the country to be hit with similar class action litigation.
While terms of the settlement are confidential in the case Nelson, et al v. Ent Credit Union, which was filed in March, in a statement Ent said the settlement will include refunds paid to affected members of all the identifiable overdraft fees and insufficient funds fees (NSF fees) raised in the lawsuit.
According to the statement from Ent, the excess overdraft fees and NSF fees were primarily caused by software issues that were unknown to the credit union until the lawsuit was filed, the Colorado Springs Business Journal reported.
“Our goal is to always do right by our member-owners,” Ent CEO Chad Graves said in a released statement. “We are truly sorry for the inconvenience this has caused our members and are grateful to both our members and their attorneys for bringing it to our attention. While we believe our member agreement allowed for the charges in question, the way the fees were assessed isn’t consistent with our values, nor were they policies we would have ever intentionally created. That’s why we are refunding all the fees in question, plus interest, to members affected over the course of the past three years.”
Reasons Cited for Issue
In its statement, Ent said the charges resulted from two primary sources that Ent only became aware of as a result of the lawsuit. The first is a default hold setting in its core transaction system software, which allowed for non-PIN, signature-approved debit card transactions to result in a courtesy pay charge although the account was positive at the time the member made the debit card transaction, but negative when it was paid by Ent, the credit union said.
The second issue was related to multiple attempts from merchants to collect payments owed, which could result in more than one fee for the same payment, Ent added.
Processes Changed
In its statement Ent said it has changed both processes to avoid future occurrences, and that since the processes were modified it has been conducting a thorough search of transaction data to determine all members that were impacted, the Colorado Springs Business Journal reported.
Ent said it expects to contact all impacted members with refunds before the end of 2019.
The plaintiffs and the class in this case are represented by Jeffrey Kaliel and Sophia Gold of the Washington, D.C.-based law firm of Kaliel PLLC, and by Franklin Azar and Michael Murphy of the Denver-based law firm of Franklin D. Azar & Associates, P.A. Both firms have been active in similar litigation against credit unions.