Two more credit unions hit with class-action suits for overdrafts

Two more credit unions are being targeted in class-action lawsuits related to overdraft fees.

Both Apple Federal Credit Union and Envision CU were hit with complaints regarding overdraft practices recently, following on the heels of Chicago-based Alliant CU being sued earlier this summer. That suit came out just weeks after credit union trade groups warned that law firms were using social media ads to specifically target credit union members who had been subject to overdrafts.

In the case of $2.6 billion-asset Apple FCU, lead plaintiff Jamie Liggio accuses the Fairfax, Va.-based credit union of deceptively promising that it only charges overdraft fees if there is not enough money in the account to cover a transaction and if the accountholder has given consent.

However, the plaintiffs asserted that the credit union regularly charges overdraft fees even when the account has enough money to cover the transaction and without the account holder's consent. In court documents, Liggio alleges she was repeatedly charged overdraft fees on routine transactions, even though “her account balance never went into the negative for the supposed overdraft event.” In addition, the plaintiff claims she was repeatedly charged overdraft fees resulting from one-time non-recurring debit card transactions, even though she never gave consent to Apple FCU to authorize such transactions.

Apple FCU, the suit alleges, charged overdraft fees of $29 each for debit card and other transactions.

Liggio estimated in court documents that over the past four years alone, Apple FCU has “siphoned” more than $8,000 out of her checking account at the credit union. She described Apple's practices as “deceptive, unfair and unconscionable” and claimed they breached the contractual promises that Apple FCU made to all its members.

According to the suit, plaintiff and “numerous” other Apple FCU customers have suffered monetary damages for the credit union’s practices. Liggio is seeking monetary damages, restitution and injunctive relief.

Robert L. Sowell Sr., SVP of community relations at Apple FCU, said the credit union "maintains that its actions were proper and that there is no merit to the claims asserted by Ms. Liggio.”

‘Unfair and unconscionable'

Similarly, Tallahassee, Fla.-based Envision FCU is being sued for “unfair and unconscionable” overdraft fees, with lead plaintiff Reina Daniels alleging fees were assessed even when her account had not been overdrawn.

Daniels claims these practices breached contractual promises made in the $560 million-asset credit union’s adhesion contracts, namely the promise to charge overdraft fees only on transactions which led to overdrawn accounts. She is seeking monetary damages, restitution and declaratory relief.

Envision did not respond to Credit Union Journal’s request for comment.

This story was updated at 10:17 a.m. on Sept. 17.