Consumer Protection Law

Consumer protection law questions? Ask a lawyer now.

Ask a Lawyer,
Get an Answer ASAP!

This is about overdraft fees: I am a sole proprietor and was…

Customer Question
This is about overdraft fees...
This is about overdraft fees: I am a sole proprietor and was told by my bank that I had to open a business account. They did not inform me that business accounts do not allow account holders to opt out of overdraft protection. Whether or not the bank decides to decline a charge or go into overdraft is decided case-by-case, at the bank's discretion. I had 12 small charges before Christmas (last-minute gifts) that went into overdraft. Rather than decline the charges, the bank chose to honor them, putting me into overdraft. The following day, they decided to reverse each charge, charging me $40 per charge. (I was also charged $25 per transaction by the retailer when the charges were reversed.) I asked the bank to refund me the fees but they have refused. I am thinking of taking them to small claims but thought I should get a legal opinion first.
Thanks!
Submitted: 2 years ago.Category: Consumer Protection Law
Show More
Show Less
Ask Your Own Consumer Protection Law Question
Answered in 15 minutes by:
1/20/2016
Consumer Protection Lawyer: Lucy, Esq., Lawyer replied 2 years ago
Lucy, Esq.
Lucy, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 32,264
Experience: Lawyer
Verified

Hi,

I'm Lucy, and I'd be happy to answer your questions today.

First of all, what you're talking about is not overdraft protection. Overdraft protection means that you have a bank account or credit card attached to your checking account, and money is transferred to cover each charge. If you had overdraft protection, all of these charges would have been approved and paid, and you'd have an overdraft protection fee. Based on what you've described, you do not have overdraft protection, which means that the bank would only be liable if they told you that you were protected.

When you opened the account, they should have given you a stack of disclosures or referred you to their website to get them. By signing the account signature card, you're saying "I agree to the terms and conditions of this account," which basically means you're saying that you got the disclosures, even if you didn't. That's important, because it means those terms are binding on you. And the disclosures should say that the bank has discretion to approve or return transactions at their discretion.

Here's the problem with check card purchases. When you run your card, the merchant sends an inquiry, checking to see how much money is in the account. Those inquires fall off the account and are only officially charged when the bank receives a signed copy of your receipt (or a telephone/internet authorization). When they get the inquiries, the bank has no possible way of knowing what checks you have outstanding, or if there are other check card purchases that are going to come through, or if you withdrew cash from another bank's ATM that they aren't aware of you. And that means that it's impossible to rely on the bank to decline charges when you don't have the money. It's up to the account owner to know how much is in the account and only make a purchase when you know the funds are there or you don't mind paying an overdraft charge.

Bank disclosures are VERY well written to reduce the bank's liability in this type of situation. And that unfortunately means that the chances of winning a small claims suit against the bank based on the facts you've provided is quite low. You haven't pointed to anything that the bank did wrong, since they're not obligated to decline transactions. What you can do is call and ask to talk to a supervisor, explain the mistake, and see if they would be willing to reimburse some of the fees as a courtesy. Sometimes they will.

If you have any questions or concerns about my response, please reply WITHOUT RATING. It's important that you are 100% satisfied with my courtesy and professionalism. Otherwise, please rate my service positively so I am paid for the time I spend answering questions. If you are on a mobile device, you may need to scroll to the right. There is no charge for follow-up questions. Thank you.

Ask Your Own Consumer Protection Law Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a consumer protection lawyerLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lucy, Esq. Your Own Question
Lucy, Esq.
Lucy, Esq.
Lucy, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 32,264
32,264 Satisfied Customers
Experience: Lawyer

Lucy, Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Lawyer

7,125 satisfied customers

Licensed attorney helping individuals and businesses.

Ely

Ely

Counselor at Law

3,436 satisfied customers

Private practice with focus on family, criminal, PI, consumer protection, and business consultation.

Barrister

Barrister

Lawyer

1,679 satisfied customers

Attorney,17 years experience in consumer protection areas

P. Simmons

P. Simmons

Lawyer

1,227 satisfied customers

16+ yrs. of legal experience.

LADY LAWYER

LADY LAWYER

Lawyer

748 satisfied customers

Consumer Lawyer

RGMacEsq

RGMacEsq

Lawyer

604 satisfied customers

Licensed Texas General Practice Attorney

RobertJDFL

RobertJDFL

Lawyer

517 satisfied customers

Experienced in multiple areas of the law.

< Previous | Next >

Related Consumer Protection Law Questions
We have been scammed and now our bank is charging us
We have been scammed and now our bank is charging us thousands for a bad check they cleared … read more
Zoey, JD
Zoey, JD
Doctoral Degree
198 satisfied customers
What are the charges for CC use, without consent. The credit
Hello - What are the charges for CC use, without consent. The credit card holder has called the bank and reported the card lost or stolen. The card was a part of a checking out and thus only had 30 do… read more
Ben S.
Ben S.
Owner
Juris Doctor
558 satisfied customers
I understand part of the Dodd- consumer protection law
I understand part of the Dodd-Frank consumer protection law provides that that banks must post the smallest debit card charges first and post the largest charge last to avoid multiple overdraft fees. … read more
Legal Expert Justin
Legal Expert Justin
Law Degree
229 satisfied customers
On July 17, 2016, my daughter made an online hotel
On July 17, 2016, my daughter made an online hotel reservation with Hotwire. She booked dates of July 23-27. However after booking she realized that she gave them the wrong dates. It should be July 25… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
What is the legal requirement for notifying a person of an
What is the legal requirement for notifying a person of an adverse action by a bank or a collection agency as far as having to use Certified Mail to ensure delivery of a notice prior to taking the adv… read more
CalAttorney2
CalAttorney2
Attorney
Doctoral Degree
8,845 satisfied customers
I have a business account with a Debit/Credit card attached
I have a business account with a Debit/Credit card attached to it. After the account went into overdraft there was a first overdraft fee of $26. That I understand. Afterwards there were 11 accidental … read more
LegalGems
LegalGems
Juris Doctorate
12,814 satisfied customers
What are the specific advantages to using a debit card when
What are the specific advantages to using a debit card when a consumer has a no annual fee credit card that has a grace period and is on autodraft to be paid in full, and the credit card gives a hefty… read more
Law Pro
Law Pro
Doctoral Degree
19,000 satisfied customers
My boyfriend had an account at the bank but only used his savings
My boyfriend had an account at the bank but only used his savings account. The bank after many years told him he needed to get a debit card because he was doing too many transactions from his savings … read more
MShore Law
MShore Law
Doctoral Degree
1,233 satisfied customers
I have had a checking account with Chase Bank since 1973. In
I have had a checking account with Chase Bank since 1973. In March I was ill and made the terrible mistake of accepting a number of payday loans. My earnings had increased this year and I believed, in… read more
MShore Law
MShore Law
Doctoral Degree
1,233 satisfied customers
I have an email from nhl gamecenter from 4-20-11 saying my
I have an email from nhl gamecenter from 4-20-11 saying my account subscription and auto renewal has been canceled. The new season has started and they took money from my account as if I was renewing.… read more
MDLaw
MDLaw
Attorney
Post-Doctoral Degree
358 satisfied customers
I closed my bank account with the balance of $71.80. Thus I
I closed my bank account with the balance of $71.80. Thus I was given $71.80 cash on the day I closed my account. The reason I had to close it because I had a charge of $39.99 which was not mine and I… read more
MShore Law
MShore Law
Doctoral Degree
1,233 satisfied customers
I recently had a situation, where I had a pre authorized debit
I recently had a situation, where I had a pre authorized debit coming out of my account. I had called the company and instructed them that I would not have the funds available at the time, and not to … read more
Lucy, Esq.
Lucy, Esq.
Lawyer
Juris Doctor
32,264 satisfied customers
In April, Bank of America forced closed one of my accounts,
In April, Bank of America forced closed one of my accounts, I went into the bank to find out about paying the balance so no further actions would be taken, the customer service rep told me the balance… read more
Infolawyer
Infolawyer
Lawyer
Doctoral Degree
7,125 satisfied customers
bank of America claims their atm and electronic funds verificati&
bank of America claims their atm and electronic funds verification is not dependable reference when the answer is receipted, "transaction approved" or the balance is listed on the receipts. My receipt… read more
Lucy, Esq.
Lucy, Esq.
Lawyer
Juris Doctor
32,264 satisfied customers
I applied for a work at home position to work at home with
I applied for a work at home position to work at home with Allston Group Inc. They did an ACH transfer to my checking account in the amount of $4,900.00. I processed this monet according to their inst… read more
Infolawyer
Infolawyer
Lawyer
Doctoral Degree
7,125 satisfied customers
Hello, I have had a checking account with US Bank for about
Hello, I have had a checking account with US Bank for about 4 years. I was going through tough times in 2008 and there were a few times I overdrew my account. I may not have a lot of money however, I … read more
TJ, Esq.
TJ, Esq.
Juris Doctor (JD)
11,462 satisfied customers
My Fiance and I have been charged thousands of dollars in overdraft
My Fiance and I have been charged thousands of dollars in overdraft fees from TCF Bank, which total a good percentage of our income. The bank is certainly talented ensuring they get as many charges fr… read more
FLACORPLAWYER
FLACORPLAWYER
Doctoral Degree
1,750 satisfied customers
My case goes back to 2005 February. I took over a convenient
My case goes back to 2005 February. I took over a convenient store and had set up the checking and merchant service through Wells Fargo bank. However, I found out in May that all the transactions done… read more
FLACORPLAWYER
FLACORPLAWYER
Doctoral Degree
1,750 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x