DETROIT–A law firm here is running newspaper ads headlined, “Attention Credit Union Members: Has your credit union assessed multiple overdraft charges when you believed you had a sufficient balance?"
One attorney who represents credit unions is warning that there will be “more of these lawsuits.” The ads received significant press attention in the Detroit Free Press.
The newspaper ads in Detroit are being run by the Birmingham, Mich.-based Michael B. Serling law firm, which said it is seeking people who have been the victims of "multiple overdraft charges.” The Serling firm has been running similar ads seeking victims of mesothelioma and lung cancer caused by asbestos exposure.
“Has your credit union assessed multiple overdraft charges when you believed you had a sufficient balance?” the ads ask. “Certain credit unions determine your ‘available balance’ in a manner that understates the actual balance.”
At least 10 credit unions in the country have been sued over their overdraft practices, including two in Michigan—United FCU in St. Joseph and Advia in Kalamazoo.
Allegations CU Members Being Misled
The basis for the litigation is allegations that CU members are being misled about the transactions that can lead to overdraft fees, as well as allegations that transactions are being processed by size rather than chronology to ensure overdrafts and the resulting fees occur.
"You're unaware and you're being deceived into what circumstances can put you into overdraft status," Philip J. Goodman, counsel with the Michael B. Serling law firm told the Detroit Free Press.
Michael Bell, an attorney with the Michigan law firm Howard & Howard, told CUToday.info, “All these lawyers now are blanketing the market with advertisements, hunting for plaintiffs. There will be more of these lawsuits, unfortunately, as there is a fixation at the moment by plaintiffs’ lawyers on these matters. I think they feel it is easy to get plaintiffs because so many people use debit cards and so many people get dinged with an overdraft.”
The Free Press reported the two cases involving the two Michigan credit unions are seeking class-action status. The Advia case is in the U.S. District Court for the Western District of Michigan, Southern Division in Grand Rapids. The United Federal Credit Union case is in U.S. District Court, District of Nevada. The credit union is headquartered in Michigan but has a sizable operation in the Reno area, the Free Press added.
The suit against Advia asserts that Advia charged overdraft fees for transactions when there was enough money in the account to cover the transactions, according to the Free Press.
"Just to give one example," the lawsuit noted, "on June 27, 2015, plaintiff had a balance of $30.48 before a $7 debit card transaction was posted to her account, leaving her with a balance of $23.48,” the Free Press quoted the lawsuit as stating.
The lawsuit claims that ACU member Becky Pinkston-Poling, a Kalamazoo resident, had enough money in her account to cover the transaction. “But she ended up being charged a $32 overdraft fee on the $7 transaction because of how Advia calculates balance,” the Free Press said.