Avoid legal risk with transparency and full disclosure

Three precautions to mitigate risk of overdraft/nsf fee demand letters.

Legal scrutiny for community banks and credit unions has picked up recently with an increase in the number of demand letters alleging deceptive practices and excessive Overdraft/NSF fees. While recent allegations of improper fee assessment and misleading disclosures aren’t new, the actions by plaintiff attorneys have become more aggressive.

In some cases, attorneys have used social media platforms to target consumers who have been charged overdraft fees in an effort to initiate class action lawsuits. And it turns out, efforts to provide information intended to explain the assessment of overdraft and NSF fees via websites have backfired as plaintiff attorneys scour the web to identify potential class action targets.

Following are three precautions you can take to mitigate your risk of potential legal issues from Overdraft/NSF fee demand letters. A commitment to these best practices can also improve your level of compliance certainty and increase awareness among your account holders about how your overdraft service works to improve their financial well-being.


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