Customers Seek $5 Million in Damages
A billion-dollar bank in the US is facing a class-action lawsuit for allegedly charging customers excessive overdraft fees.
Overdraft Fee Practices
Customers LaNita Criswell and LaSheena Neal claim that Frost Bank imposed $35 overdraft fees on transactions that did not exceed account balances. They allege that this practice violates the Electronic Funds Transfer Act and breaches their contract with the bank.
According to the plaintiffs, Frost Bank would “sequester” funds for payment even when accounts had sufficient funds. Despite this, the bank allegedly charged overdraft fees on many of these transactions.
Bank’s Response
Frost Bank has stated that it removed the disputed fees last summer. The Consumer Financial Protection Bureau (CFPB) has also proposed a rule to target similar “junk fees.”
Previous Lawsuit
In 2021, Frost Bank faced a similar lawsuit alleging unfair and unconscionable overdraft fee practices. The case was settled and dismissed in 2022.
Overdraft Grace Period
Frost Bank expanded its $100 overdraft grace period in June 2022. However, the bank reserves the right to not pay items in certain cases, such as accounts with questionable standing or a history of excessive overdrafts.
Frost Bank’s Status
Frost Bank is one of the largest 50 banks in the US, with over $50 billion in assets and 5,000 employees.
