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Excessive Bank or Credit Card Fees

Irvine Bank & Credit Card Fee Lawyers

Are You Taken Advantage of by Lenders?

For years, California consumers have been burdened by the unethical practices of banks and credit card issuers. The price that consumers have paid for the unfair practices of financial institutions include:

  • Excessive overdraft fees charged to checking accounts.
  • Excessive late payment fees charged to credit cards.
  • Disproportionate fees for exceeding credit card limits.
  • Unfair increases in credit card interest rates.

In many cases, the amount of money involved is too small to warrant a lawsuit by an individual consumer. By starting a class action lawsuit, however, consumers can vindicate their rights while helping others whose rights have been violated by the unscrupulous practices of financial institutions.

The bank and credit card feel attorneys at the Aegis Law Firm help consumers throughout Orange County bring class action lawsuits for excessive bank and credit card fees.

If you believe your financial institution has violated laws that protect consumers, contact the Aegis Law Firm for a free case evaluation.

Overdraft Fees

A federal law that took effect in 2010 prohibits banks from enrolling a customer in an “overdraft protection” program unless the customer affirmatively opts to join the program. Unfortunately, banks continue to enroll customers in overdraft protection without asking their permission.

Overdraft protection sounds like a good idea, but for many customers, the costs outweigh the benefits. Without overdraft protection, if you use your debit card to make a $300 purchase and you only have a $290 balance in your checking account, the store will simply decline to process the transaction. With overdraft protection, your bank will approve the transaction and you will owe the bank $10. But the bank will charge you a fee for covering the overdraft. A typical overdraft fee is $35. Charging customers $35 for a short-term $10 loan is excessive by any reasonable standard.

Banks make it easy for customers who live paycheck-to-paycheck to incur unexpected overdrafts. It is often difficult to know your exact bank balance because funds on deposit and “available funds” are not always the same. A customer who deposits a paycheck in the morning may not have access to those funds that same day. Depending on the size of the deposit, some of all of the funds may be available the next day, although some funds in larger deposits may be unavailable for several days. Adding to the confusion, availability rules differ for new accounts and for accounts that have had several recent overdrafts.

Excessive overdraft fees may violate California and federal laws that prohibit fraud, unfair trade practices, and false advertising. Class action lawsuits are usually the most productive way to obtain relief when banks charge excessive overdraft fees.

Credit Card Fees

Since 2010, a federal law known as the Credit CARD Act (Credit Card Accountability Responsibility and Disclosure Act) has limited the fees that a bank or other credit card issuer can charge for exceeding the card's credit limit and for making late payments.

Current rules provide:

  • The fee for exceeding a credit limit or for making a late payment one time cannot exceed $27 (as of 2016). The fee is indexed to inflation and is therefore subject to change each year.
  • The fee for making additional nonconsecutive late payments within 6 months of a late payment cannot exceed $37 each. The maximum fee for missing two consecutive payments is 3% of the delinquent balance.
  • Notwithstanding the maximum charges, the fee cannot exceed the amount of the violation. A customer who exceeds the card's credit limit by $5 cannot be charged more than $5. A customer who makes a late payment when the minimum payment due was $10 cannot be charged a late fee of more than $10.
  • A credit card issuer may not charge an “inactivity fee” if you do not use your card.
  • A credit card issuer may not charge multiple penalties for a single late payment.

Not call credit card issuers observe those rules. If you believe that your bank has charged you an illegal fee for a late payment or for exceeding your spending limit, contact the Aegis Law Firm to request a free review of your case.

Credit Card Interest Rates

The most common violation of the Credit CARD Act involves one of its most important protections. Banks are notorious for raising interest rates when a customer makes even a single late payment. The Credit CARD Act requires credit card issuers to review any increased interest rate every 6 months and to reduce the rate if appropriate. Credit card companies rarely consider it appropriate to reduce high-interest rates, even if the customer has established a history of paying on time.

Federal Reserve Board rules also prohibit credit card issuers from:

  • Raising interest rates during the first year after an account is opened.
  • Applying increased rates (other than for late payments) to existing credit card balances.
  • Charging excessive fees for subprime credit cards.
  • Allocating payments in a way that maximizes interest charges (for example, by allocating payments to charges with a lower interest rate rather than cash advances that bear a higher interest rate).

What Victims Can Do

Contact the Aegis Law Firm if you believe your credit card issuer has violated consumer protection laws by charging you an excessive interest rate. A class action lawsuit may be your best chance to obtain a meaningful remedy.

Call (800) 543-4829 to speak with one of our Irvine bank and credit card fee lawyers in Irvine and get help today.

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