HSBC Sued for “Excessive” Overdraft Fees
An HSBC Holdings Plc. unit was sued earlier this week for collecting what are described as “excessive” overdraft fees and failing to alert consumers when they make a transaction that incurs the bank’s $35 overdraft charge.
The lawsuit, filed in the New York state Supreme Court by a group of customers who claim they were billed improper overdraft fees, is a proposed class action that seeks to represent New York residents who bank at HSBC Bank USA NA.
According to the lawsuit, HSBC Bank reorders debits from highest to lowest during the course of the day. Therefore, the suit claims, if a customer has a $50 balance and makes four transactions of $10 and one for $100 later the same day, HSBC debits the transactions from largest-to-smallest, subjecting the customer to four overdraft fees instead of just one.
“”It is through manipulation of customers’ transaction records that HSBC maximizes overdraft penalties imposed on customers,” the complaint states.
Baron & Budd has been at the forefront of the excessive bank overdraft fee litigation. Bruce Steckler, head of the firm’s general litigation section, currently serve on an MDL for cases that have been consolidated in California. Learn more here.