[Curlyben]

Lawsuit Filed Against SunTrust Banks, Inc. Regarding Overdraft Fees

Lawsuit claims that SunTrust engages in unfair and bad faith business practices with respect to its assessment of overdraft fees on consumer checking accounts.
Atlanta, GA (PRWEB) April 10, 2009 -- Atlanta-based law firm Webb, Klase & Lemond, LLC has filed a class action lawsuit against SunTrust Banks, Inc. alleging that SunTrust engages in fraudulent, deceptive, unfair, and bad faith business practices with respect to its assessment of overdraft fees on consumer checking accounts. The suit also claims that SunTrust, which is headquartered in Atlanta, Georgia, has engaged in improper and unfair practices in order to increase the number and amount of overdraft and/or service fees imposed upon consumers' accounts. The case, styled Peterson v. SunTrust Banks, Inc. was filed in the Superior Court of Fulton County, Georgia on April 8, 2009 and has been assigned Case No. 2009CV167326.
According to the suit, Webb, Klase & Lemond's client had overdraft fees deducted from her consumer checking account even though there were sufficient funds in her account to cover the transactions in question.

In addition, the suit alleges that SunTrust routinely enforces a policy whereby charges incurred are posted to consumer accounts in order of largest to smallest amounts, even when larger charges occur days after smaller charges in an effort to maximize the number and amount of overdraft and/or service fees imposed upon consumer accounts. SunTrust's policy allows it to post items to an account in an order that is not chronologically based and is not based on any other proper rationale.

Plaintiff asserts that SunTrust could easily program its software systems to minimize insufficient funds fees without any increased costs to SunTrust.

Instead, SunTrust has programmed its systems to order charges in such a way as to maximize fee income. The Complaint alleges that at the very least, these practices violate SunTrust's obligation to act in good faith and to deal fairly with customers; at worst, they amount to fraudulent, deceptive, and unfair business practices.

Source: http://www.prweb.com/releases/2009/04/prweb2315504.htm

Insufficient/unavailable funds penalty 1
Extended overdraft fee2
$ 35.00
$ 36.00 (effective 5/1/09)
$ 35.00
$ 36.00 (effective 5/1/09)



And I thought this type of activity was limited to the UK, but it seems to be spreading, RAPIDLY!!

It's about time the Banks stop treating us as "Cash Cows" and treated us with the respect we deserve..

[N0help4u]

That is why I quit using banks and use money orders. I use to be able to dispute the fact that their taking out their $25. Fee is what caused my second and third check to bounce because I deposited more money that should have covered the other checks.
Now they CLAIM they send overdraft notifications immediately (which I do not believe) and they tell you it is your responsibility to keep an extra $100. In the bank (like I have an extra $100.) Yeesh, after they get done with their fees it can cost you hundreds of dollars cause now they charge you $35. For each overdraft PLUS $5.00 per day for each one and they do not notify you immediately as they claim.


And when I quit using banks I swore they had to be posting them out of order as you are saying here.

[tomder55]

Thanks for posting this Curley . I've been looking to find one against HSBC . I gave an earful to one of their customer reps recently and of course have changed banks . We keep good records but still they twice attempted to hit us with overdraft fees. My daughter purchased some of the most expensive hamburgers on the planet using her debit card because she was a good customer entitled to 'overdraft protection'.

The bank I now use asserted to me that this will not happen .

[N0help4u]

Yeah my son got three overdrafts for 'bouncing' 16 cents at Coldstone which he has never even been to and $7.00 at a McDonalds it ended up costing him almost $300. Because the bank didn't notify him. Then by the time they did he didn't have any money to cover it and had to wait a few more days before he could deposit anything.

[Curlyben]

As you might know, or might not, our Office of Fair Trading (OFT) are currently involved in a Test Case with 8 banks over the legality of their charges.
In the case of an unarranged overdraft these can be as much as £38 ($56) per transgression with added daily charges, totalling £100's a month!

Independent studies have found that the true cost to the Banks is in the region of £2.50 (sub $4).
Of course the Banks refuse to make public their costs otherwise everyone would realise just how much we are being fleeced.

To date, before claims where stayed due to the Test Case, just under £1 billion have been reclaimed through the court system.
Of course the Banks tended to take things to the wire and play a rather silly game of "Who Blinks First".

It is thought that the Banks are making £1-2 BILLION+ a year EACH from these charges, so they won't give them up with out a fight..

BUT, bearing in mind WE the tax payers have pumped into them over the last few months, a complete refund would be a mere drop in the ocean and would be an extremely worth while stimulus for the UK economy as a whole.

[N0help4u]

With my son it took about two weeks for his two overdrafts
Totaling less than ten dollars to become almost $300.
I swear it is highway robbery and the toll roads don't even rob you as bad so it is worse than highway robbery!

[tomder55]

Curley that is a great point. Our banks appear ready to refund the TARP money but the Obama adm. Doesn't want to do so because they would lose their dicatorial control over the finance sector.

A deal could be made to refund xs fees they have collected in return to their being released from bondage.

[excon]

Hello ben:

The banks are crooks and need to be brought down a peg or two...

I say "crooks", but they're probably not doing anything illegal. During the last administration, the banks, in the form of their lobbyists, virtually CHANGED the way the banks did business. Legislation under the dufus in chief, gave the credit card companies the right to unilaterally change their contract with the consumer, for any reason at all or no reason. It's in the fine print.. I mean the REALLY fine print, so that the banks can be assured that nobody reads it... (The fine print deal? That too is another righty law written so that consumers get ripped off.)

These same lobbyists wrote laws that allows your bank to charge outrageous overdraft fees...

These same lobbyists wrote a new bankruptcy law that made it harder for a consumer to write off his debt...

These same lobbyists changed our usury laws so the banks could rip us off royally, but pretend they were acting lawfully...

I complained about the above right here on this website... I think the righty's here argued with me, and now they're complaining about how they're being ripped off.

Imagine that.

excon

[Curlyben]

In the UK we are taking action under the Unfair Terms in Consumer Credit Regulations (UTCCR) and at present the Courts are deciding if the Banks terms fall within these regulations and if the OFT can indeed take action.

So far the OFT has won 2 cases (Original and First appeal) and it is currently awaiting the Final appeal to the House of Lords, the UK's Supreme Court.
Basically the Banks are dragging this whole thing out.
After this part there is likely to be a further case concerning the actual fairness of charges!!

This has been ongoing since mid 2007, and you think the American system is slow ;)

[tomder55]

These same lobbyists wrote laws that allows your bank to charge outrageous overdraft fees...

There was no need for lobbying . If there ever were regulations regarding overdraft it was state laws. Federal laws have never stipulated restrictions.

National banks were required to disclose the fees in 2005 ; adopted by the Board of Governors of the Federal Reserve System .The new rules applied only to national banks.This changed a LONG STANDING opinion by the Fed that these transactions were exempt from the requirements of the Truth in Lending Act.
http://www.federalreserve.gov/boardd...005/sr0503.htm

[excon]

There was no need for lobbying .

Hello again, tom:

Maybe not, but I'm sure the lobbyists were doing their thing at the state level too. You don't??

Here's another bank rip off that was allowed under the dufus in chief... There were NONE of these rip off lenders BEFORE Bush.

I quote from a NY Times editorial:

"It seems like just a little loan, a few hundred dollars in advance of payday. But at an interest rate of $15 per $100, that little loan gets big in a hurry. And if another loan is needed — which sometimes happens, since the last payday loan took so much pay — total costs can soon exceed the amount borrowed in the first place.

Payday loans — advances that are to be repaid on payday — are so burdensome and so pernicious that in 2006 Congress effectively banned them for military families. Given all the problems workers face right now, Congress should extend this protection to everybody. Unfortunately, some members are pushing an ersatz reform that would allow payday operators to charge what amounts to an annual percentage rate of 391 percent.

excon

[tomder55]

Your problem is your myopic blame Bush for everything.

Payday loans predate Bush. California, in July 1996(Senate Bill 1959), authorized payday loans, recognizing them as “secure, small emergency loans without the red tape.” I can link to a number of sources if you wish . California's legislature thought they were doing consumers a favor since where else can they get a loan without a credit check, without involving their credit report, without collateral, and have the money Now when they needed it ?

[excon]

Your problem is your myopic blame Bush for everything.

Hello again, tom:

I don't deny it. Clintoon was a Bush clone anyway.

excon

[ETWolverine]

CurlyBen,

I am not going to try to defend bad behavior. And those fees are pretty high. (I don't know whether they qualify as USURY in the legal sense, but they are HIGH. I also don't know about the "deceptive practices" part. I guess that would depend on what their disclosure practices look like.)

But as a Banker myself, I need to ask you how you think banks are supposed to earn a profit if not through fees?

I don't think of my customers as cash cows. I'm a relationship banker, and I value my relationships with my customers highly. High fees jeopardize those relationships.

But on the other hand, having NO fees brings on abuses... overdrafts, charges against uncollected funds, misuse of various bank products like online banking, remote deposit capture, etc. We need to be able to reign in those abuses as part of our fiduciary responsibilities to our shareholders and depositors.

And if there are no fees, we can't maintain a profit, which means we will close down, leaving customers without the credit they need to operate their businesses.

There needs to be a happy medium. Where that medium lies is the tightrope that bankers everywhere walk all the time.

Look at it from our point of view...

Elliot

[tomder55]

Is there a reason why debit charges are not refused at the point of purchase or at the ATM ? Why are accounts linked if the linkage doesn't cover the possibility of overdraft ? Even if there is a nominal fee for the transfer between accounts it would be much less than the $35 /transaction that typically happens now.

Then what happens is what I described happens typically to college students ,they end up paying for very expensive burgers. Perhaps the solution would be for them to not have debit and credit cards in the 1st place. But the banks have been very aggressive soliciting their business.

The number of complaints by consumers has reached Congress' ears and there is legislation in the works. Perhaps it would've been better for the banks to treat their customers as customers they considered worth having . As I mentioned ;the bank I am currently dealing with does not operate the same way as HSBC did.

[Righty-2]

Hello ben:

The banks are crooks and need to be brought down a peg or two...

I say "crooks", but they're probably not doing anything illegal. During the last administration, the banks, in the form of their lobbyists, virtually CHANGED the way the banks did business. Legislation under the dufus in chief, gave the credit card companies the right to unilaterally change their contract with the consumer, for any reason at all or no reason. It's in the fine print.. I mean the REALLY fine print, so that the banks can be assured that nobody reads it... (The fine print deal? That too is another righty law written so that consumers get ripped off.)

These same lobbyists wrote laws that allows your bank to charge outrageous overdraft fees...

These same lobbyists wrote a new bankruptcy law that made it harder for a consumer to write off his debt...

These same lobbyists changed our usury laws so the banks could rip us off royally, but pretend they were acting lawfully....

I complained about the above right here on this website.... I think the righty's here argued with me, and now they're complaining about how they're being ripped off.

Imagine that.

excon

You may take me for a ranting debtor but I can assure I'm not. I don't know enough about the States but I can assure you that in the UK the banks ARE doing something illegal, in fact many things illegal such as false accounting for starters & thanks to the credit crunch & banks being under greater scrutiny many things are now going to be exposed;)

[Curlyben]

CurlyBen,

I am not going to try to defend bad behavior. And those fees are pretty high. (I don't know whether they qualify as USURY in the legal sense, but they are HIGH. I also don't know about the "deceptive practices" part. I guess that would depend on what their disclosure practices look like.)

Usury, maybe not but certainly UNFAIR and completely disproportionate.

But as a Banker myself, I need to ask you how you think banks are supposed to earn a profit if not through fees?

How do Banks normally earn a profit ?
It certainly isn't through the charges levied on personal account holders.

For example, in better times, Barclays Bank posted £6 Billion profits, about £1 Billion of these where from account charges. So where did the other £5 Billion come from ?

I don't think of my customers as cash cows. I'm a relationship banker, and I value my relationships with my customers highly. High fees jeopardize those relationships.

Good old fashioned Banking ethics here and I congratulate you for this outlook.

But on the other hand, having NO fees brings on abuses... overdrafts, charges against uncollected funds, misuse of various bank products like online banking, remote deposit capture, etc. We need to be able to reign in those abuses as part of our fiduciary responsibilities to our shareholders and depositors.

No argument there, but the current level of charges are COMPLETELY unacceptable. Remember that these "abusers" are also depositors and Bank customers, see comment above.

And if there are no fees, we can't maintain a profit, which means we will close down, leaving customers without the credit they need to operate their businesses.

Profits are generated else where in the Banking system and NOT directly from the customers, as shown above. Remember as well as large fees Banks also charge interest on the overdrawn amounts, so basically end up with two bites of the same cake.
Also, especially for people on very tight budgets, application of unfair charges leads to a charges debt spiral. Whereby the charges applied to an account causes a repartition of a charges scenario and so it goes on.
The Banks end up making money from personal debt at a very personal level.

There needs to be a happy medium. Where that medium lies is the tightrope that bankers everywhere walk all the time.

Totally agree and that is the really difficult part.
A total overhaul of the whole charging system is what is being sort, something that's is more representative of the transgressions involved and not a simple FLAT charge per occurrence with added interest.
Now surely the large, in some cases up to 30%, interest on the overdrawn amount would be an overall fairer method for the Banks to cover their costs.
This way the people that make small "mistakes" are charged an appropriate amount for their error.

Look at it from our point of view...

Elliot

I can completely see you view point and I'm not point fingers at specifics, but at the industry as a whole.

On another thread I believe it was mentioned that the whole Credit Crunch was brought about by the Financial Industries greed and apparent blinkered goal of producing vast profits. While profit is the reason all business operate, the really question is at what cost.
The current financial model is clearly deeply flawed and needs reviewing and regulating. The whole Securitisation idea, while good for generating paper profits, soon unravels with disastrous effects. Not only are "normal" debts, e.g. mortgages being "repackaged", but defaulted debts are also being bought and sold in the same way. This is causing untold misery to countless millions as the defaulted debt purchasers, in some cases, are acting on the very fringes of legality. Debt collection agencies is a complete subject all on it's own and not really for this thread at all, but I'm sure you can see my point...

</rant>

[ETWolverine]

Usury, maybe not but certainly UNFAIR and completely disproportionate.

Define disproportionate.

Let me give you an example: I have a customer who just today had 11 checks that bounced due to uncollected funds. The normal charge is $25 per uncollected item. That's $275 in total charges.

That seems like a lot of money, but consider the fact that the total amounts of the checks is over $60,000, which makes it less than 1/2 of 1%.

Excessive? Disproportionate? I don't think so.

How do Banks normally earn a profit ?
It certainly isn't through the charges levied on personal account holders.

Banks earn money several ways. The most common are fees for account management, appreciation of assets and interest/dividends on investments (loans are a form of investment).

For example, in better times, Barclays Bank posted £6 Billion profits, about £1 Billion of these where from account charges. So where did the other £5 Billion come from ?

I'm not used to working in Pounds Sterling, but I can hum the tune. :p

The other £5 B came from interest on loans and dividends on investments as well as appreciation of investments in the market.

Right now, we are going through a period where interest rates are the lowest they have been in my 15-year career. Almost nobody is paying dividends on investments because nobody has excess net income to divest. And investments have DEPRECIATED in value along with the markets. So three of our four main ways of maintaining profitability are gone.

And you are suggesting that we limit the last one available to us.

Good old fashioned Banking ethics here and I congratulate you for this outlook.

Thank you. That's why I like working for smaller banks like community banks. They allow for RELATIONSHIP banking that doesn't exist in the CITIs, Chases and other big boys.

No argument there, but the current level of charges are COMPLETELY unacceptable. Remember that these "abusers" are also depositors and Bank customers, see comment above.

See my example above of a customer who is abusing our good graces... and incidentally floating his cash-stream for an unofficial "loan" of 0.5% to boot. What part of that is unacceptable?

Profits are generated else where in the Banking system and NOT directly from the customers, as shown above. Remember as well as large fees Banks also charge interest on the overdrawn amounts, so basically end up with two bites of the same cake.

That usually only happens when the customer has "overdraft protection lines of credit" where he is charged an interest rate for the OD. However, if he has OD protection, he's not supposed to be charged the fee.

In US law, by the way, if the fees add up to more than 25 or 26% of the credit amount (including ODs, draws against uncollected amounts, direct loans, etc.) the bank is guilty of usury and ends up paying massive fines. So banks tend to be very careful to make sure that customers are not double and tripple charged excessively to avoid such situations.

Also, especially for people on very tight budgets, application of unfair charges leads to a charges debt spiral. Whereby the charges applied to an account causes a repartition of a charges scenario and so it goes on.

I agree that this is a problem, especially in the USA, where the average citizen owns as many as 8 credit cards and has three or 4 times their annual gross salary in unsecured debt.

Yes, it is a problem. But is it the BANK'S problem? We didn't force anyone into debt. Bank regulations require disclosure of all credit limits, fees, charges, regulations, limitations, penalties, etc. on paper. Where is the responsibility of the borrower? Why are WE the bad guy if someone else decides to live a lifestyle that is above their means and gets hit with fees that he was informed of before he entered the relationship with us?

The Banks end up making money from personal debt at a very personal level.

I have witnessed bank robberies. But I have never witnessed any banker pull out a gun and tell a customer, "Take this money on credit or else." Nobody is forcing anyone into debt.

Totally agree and that is the really difficult part.
A total overhaul of the whole charging system is what is being sort, something that's is more representative of the transgressions involved and not a simple FLAT charge per occurrence with added interest.
Now surely the large, in some cases up to 30%, interest on the overdrawn amount would be an overall fairer method for the Banks to cover their costs.
This way the people that make small "mistakes" are charged an appropriate amount for their error.

30% is usurous in the USA, and would result in stiff penalties for the bank. (What does that tell you about our methodology and our practices?) Most Banks in the USA charge a per-item or per-event fee. In cases where the specific type of business is just simply a part of the customers business and is a regular practice (ei: the customer uses wire transfers very often or often has to draw against uncollected), we put the customer on what is called "account analysis" and he is charged a monthly fee for all services based on level of use rather than a per-item or per-event charge. I think the system is fair.

I can completely see you view point and I'm not point fingers at specifics, but at the industry as a whole.

I knew it wasn't personal or specific. And I understand the gripes people have with banks these days.

On another thread I believe it was mentioned that the whole Credit Crunch was brought about by the Financial Industries greed and apparent blinkered goal of producing vast profits. While profit is the reason all business operate, the really question is at what cost.
The current financial model is clearly deeply flawed and needs reviewing and regulating. The whole Securitisation idea, while good for generating paper profits, soon unravels with disastrous effects. Not only are "normal" debts, e.g. mortgages being "repackaged", but defaulted debts are also being bought and sold in the same way. This is causing untold misery to countless millions as the defaulted debt purchasers, in some cases, are acting on the very fringes of legality.

See the post below for my full answer to this. I don't have time for a full explanation right now.

https://www.askmehelpdesk.com/curren...ac-260752.html

Debt collection agencies is a complete subject all on it's own and not really for this thread at all, but I'm sure you can see my point...

</rant>

On colletion agencies? Certainly. Don't get me started on them. I abhore them.

Elliot

[tomder55]

That usually only happens when the customer has "overdraft protection lines of credit" where he is charged an interest rate for the OD. However, if he has OD protection, he's not supposed to be charged the fee.

In US law, by the way, if the fees add up to more than 25 or 26% of the credit amount (including ODs, draws against uncollected amounts, direct loans, etc.) the bank is guilty of usury and ends up paying massive fines. So banks tend to be very careful to make sure that customers are not double and tripple charged excessively to avoid such situations.

Is that true ? Check out the complaints online . From my daughter's perspective the OD was minimal and the fees were $35 /per transaction... much more than a 25% fee .

[Curlyben]

Thanks for your response Elliot, we are both looking at this from the same perspective, I believe, although my focus is on personal/individual accounts rather than the larger ones.

In your first example, the fees are more than justified, but I was referring to the sub £100 level, where the charge (£35) clearly exceeds any reasonable, if not fair level. (£ or $ doesn't really matter).
How can a flat fee be reasonable in cases like this, or even in your own example?
Surely this is a penal charge!

I hope you can see where I'm coming from with this.
I'm not talking about serial abusers here, but "normal" everyday, tightly budgeted customers.

I do think you missed my point with this comment:

The Banks end up making money from personal debt at a very personal level.

I have witnessed bank robberies. But I have never witnessed any banker pull out a gun and tell a customer, "Take this money on credit or else." Nobody is forcing anyone into debt

I was referring to the possible debt spiral of tight personal budgets and unfair charges.