SAN JOSE, Calif. – A member of Alliant CU, a Chicago-based credit union giant with major operations in California, this week filed suit against the credit union regarding its alleged practices of paying off debit card transactions, the fifth big California credit union to be targeted in an overdraft suit over the last week.
The newest suit charges the $8-billion credit union with fraud and unfair business practices regarding its “courtesy pay” program, which the member claims pays off the largest debit first, instead of those made in chronological order, so as to maximize its overdrafts. “Many times,” said the suit, “the amount of the overdraft ($25) exceeds the amount of the underlying transaction.”
The suit is similar to class actions filed last week against Kern Schools FCU, SchoolsFirst FCU, Educational Employees CU and Star One CU, as well as America’s First FCU, Legacy Community FCU and Alabama Telco CU in Alabama.
All of the suits have been filed by attorneys affiliated with Jacoby & Meyers, a national tort law firm.