HATTIESBURG, Miss.–A judge has issued a stay in a proposed class action lawsuit related to allegations Sunbelt FCU charged improper overdraft fees.
In the case, the judge has ruled in favor of the credit union’s argument that the matter is a “local rather than a national issue.”
As CUToday.info has been reporting, the lawsuit is one many credit unions are either facing or have been threatened with across the country, and the plaintiff’s bar has been seeking additional plaintiffs to file such actions.
The case, Rufus McGill v. Sunbelt Federal Credit Union and filed in the United States District Court for the Southern District of Mississippi Eastern Division, involves what is broadly known as “authorize positive/settle negative,” or ASPN transactions, the term used for when a debit card transaction charges a $25 overdraft fee at the time of settlement because the account balance has purportedly been reduced in the meantime.
The Allegation
“The lawsuit argues that despite the delay between authorization and settlement, there are always sufficient funds in a customer’s account to cover an APSN transaction since Sunbelt sets aside the money to pay the merchant at the time the transaction is initially authorized and makes those funds unavailable for the customer’s use,” according to ClassAction.org.
Sunbelt FCU charges a $25 overdraft fee.
The lawsuit states, ““Defendant’s practice of charging OD Fees even when sufficient available funds exist to cover a transaction violates its contractual promise not to do so,” the complaint contends. “This discrepancy between Defendant’s actual practice and the Contract causes consumers like Plaintiff to incur more OD Fees than they should.”
CUToday.info had recent coverage of APSN litigation and other potential legal risks to credit unions here.
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