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Massachusetts Credit Union Facing Class Action Suit Stemming from Overdraft Policy

The biggest credit union in New England is looking at a class action lawsuit from customers claiming its overdraft policies are misleading. A Massachusetts federal judge made the ruling on Thursday, after upholding breach of contract claims.

At McCune Wright Arevalo, LLP, our Inland Empire class action lawyers want you to know your legal rights when filing a class action. If you and a group of people have been harmed by the same party, you may be entitled to file a class action lawsuit in civil court.

Too often in recent years, we have seen how big companies like Wells Fargo and Microsoft are prone to defrauding clients, and we want to make sure your rights as a consumer are being protected. If you are considering taking part in a class action suit, our experienced attorneys at McCune Wright Avevalo, LLP may be able to help you.

Digital Federal Credit Union

With $8 billion in assets and 700,000 members, Digital Federal Credit Union’s reach extends across Massachusetts. According to a suit against the financial giant (led by plaintiff Brandi Salls), Digital Federal Credit Union, or DCU, allegedly charged overdraft fees when the plaintiff overdrew the “available balance” in her account, even though she had funds in her “actual balance.” Since the actual balance includes pending transactions, U.S. District Judge Timothy S. Hillman determined that DCU’s overdraft policies were confusing.

DCU argued a motion to dismiss the case in September, claiming its opt-in agreement for overdraft fees, along with other customer agreements, explicitly explained their overdraft policy, including their definition of “available balance.” Hillman threw out this motion, ruling that DCU could not assume clients would understand what available balance meant unless it was explicitly explained to them. Most troubling according to his determination was the credit union’s policy of subtracting pending transactions from available balances.

"The overdraft disclosure does not provide any information clarifying that 'enough money' is to be construed as 'available balance,’” said Hillman. “I find that a reasonable person could construe 'enough money' to mean 'ledger balance.’” He went on to state that, "I find that plaintiff has plausibly argued that the contracts, even when construed together, are ambiguous as to whether they use the 'available balance' method to determine whether an account has been overdrafted.”

The lawsuit was somewhat limited in scope. Hillman found that the class could not bring claims under the Electric Fund Transfers Act, which safeguards consumers who manage finances electronically for incidents that took place more than a year before the complaint was filed. Hillman also barred two claims seeking injunctive relief for unjust enrichment and for money had and received, as he determined these were overruled by the breach of contract claims.

Filing a Class Action

Although Judge Hillman did not allow all of the class action’s initial claims to proceed, the case of Salls v. Digital Federal Credit Union does uphold the importance of the judiciary in financial oversight. Huge monetary institutions should not be allowed to take advantage of people, which is why it’s important to find a skilled class action attorney if you believe a business has taken financial advantage of you.

At McCune Wright Arevalo, LLP, our Inland Empire class action attorneys have a history of handling class actions revolving around overbilling financial institutions. We have recovered over $1 billion for our clients and, for 30 years, we have fought for the people of the Inland Empire and throughout the country. We have even gone up against Fortune 500 companies! We offer free consultations, so you know our goal is not to get money from you, but to get it from the defendants.

Experience the McCune Wright Arevalo, LLP difference, and give us a call at (909) 345-8110, or contact us online today.

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