BIRMINGHAM, Ala. – The epidemic of overdraft suits continued to spread through credit unions, with at least two more credit unions targeted by member class actions claiming the credit unions engage in unfair business practices by ordering debit card transactions by size, rather than by the date they are conducted.
In the latest, a member claims that Alabama Telco CU manipulates and re-orders debit transactions from the highest dollar amount to the lowest dollar amount so that it depletes the member’s available funds as quickly as possible in order to maximize the amount of overdraft fees collected.
Another suit filed against Legacy Community FCU in Alabama makes similar claims, as do purported class actions field last week against America’s First FCU and four California credit union giants; Educational Employees CU, Star One CU, Kern Schools FCU and SchoolsFirst FCU. A similar suit was filed in April against Xceed Financial FCU.
The suits all have ties to the class action law firm Jacoby & Myers, which has filed dozens of overdraft suits against big banks, earning multi-million dollar settlements.