VyStar hit with class action suit for overdraft fees

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VyStar Credit Union in Jacksonville, Fla., is embroiled in a new class action lawsuit that alleges it charged members multiple non-sufficient-funds fees on the same items.

The deposit agreement for the $8.6 billion-asset VyStar authorizes the credit union to enact fees when a member attempts an Automated Clearing House transaction without sufficient funds to cover it. That includes a single $32 overdraft fee or a $32 NSF fee after rejecting a transaction.

The credit union is only supposed to charge one NSF fee per assessed item “when in fact" it "regularly charges two or more NSF Fees per 'item' even though a customer only requested the payment or transfer once," the complaint said.

According to the complaint, VyStar member Heather Washington attempted an ACH transaction on Nov. 20, 2018, but VyStar rejected her payment on the item due to insufficient funds in her account. As such, Washington received a $32 NSF fee for her attempted purchase, which she is not challenging in court.

But on Nov. 23, 2018, VyStar allegedly reprocessed the same item, rejected the transaction once again due to insufficient funds and charged Washington an additional $32 NSF fee. The complaint notes that this was attempted again by VyStar on Nov. 27, 2018, racking up a total of $96 in NSF fees for one transaction.

A VyStar spokesperson said the credit union "disputes the allegations in the lawsuit but cannot otherwise comment on pending litigation."

The complaint is requesting the court or a jury to award the plaintiff damages and for VyStar to be prohibited from issuing multiple NSF fees incurred from the same item.

A number of credit unions, including Navy Federal Credit Union and Mazuma Credit Union, have been sued in recent years over their overdraft practices.

The Normand law firm of Orlando; Cohen & Malad of Indianapolis; Kaliel law firm of Washington, D.C.; Branstetter, Stranch & Jennings of Nashville; and the Johnson Firm of Little Rock, Ark., are representing Washington.

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Lawsuits Overdrafts Consumer banking Florida