Excessive NSF Bank charges with unlawful collection


(CA, USA)

I was a member of a credit union for several years of which my dad was also a member. I maintained a checking account approximately for a total of about 6 yrs. with a debit card that I used regularly. I admit I didnt keep itemized records as I that well but my monthly statements never reflected overdraft fees or negative balances. Furthermore, if I didnt have funds available, any withdrawal or POS was declined without charges incurring. After a few years, my account became continually overdrawn by several hundred dollars over a few month period. I wasn't sure how I had suddenly been causing these NSF charges and I was confused why they had allowed items to overdraft my account instead of being declined as they always had when funds were not enough. I did address the issure at my branch & was given some insane nonsense about the order in which things are processed and delays in credits, blah blah but never could explain why these fees just started appearing out of nowhere. It made no sense & I was stumpled. Then, finally I pinpointed the cause for this unexplained shift in my checking account...My C.U., without my knowlede, decided to implement "courtesy overdraft" ($30 a pop) when I signed up to Direct Deposit my paycheck. I immediately discontinued their "courtesy" and several months afterward it was almost impossible for me to catch up. I was so in the red that I stupidly opted back in thinking I had no other way to get by after such a setback. My mistake 100%, I know. Eventually the fees became so excessive that during one month in particular, they took an entire Direct Deposit paycheck and still had me negative aapprox. $1000. Now I must point out that every moth I was well in the negative from $200-$500 and they never made mention of closing or charge off of my account, EVER. However, after this blatent robbery of my money, I discontinued all Direct Deposits and suddently, my account was closed! Then they said it was over so many days negative and policy says they have to close it but couldnt say why they didn't for the last 3 years they were stealing from me. Now the icing on the cake and what I believe was an illegal tactic to get their money blows my mind. My father and I had separate accounts as well as last names but did shared a joint car loan that only was opened for that purpose and contained no actual funds in it. They transferred this $1000 charge off to this non-funded car loan account and proceeded to use that as their fraudulent way to bridge this to my dads INDIVIDUAL, personal checking account and extract the money from his account. This was the only way they had to extort money from his account. Sorry to be so long winded but I'd love to know if this was unlawful on their part? Thank you.

Reply from DebtCollectionAnswers.com:

While credit unions tend to be consumer friendly, some operate more like banks and this sounds like one of those! Many credit union's contracts have "cross collateralization" clauses that allow them to take money from deposit accounts to satisfy debts you have with them.

To find out whether the credit union could legally go after your father's account for this debt, you'd need to look at the documents both of you signed when you opened your accounts. And you'd probably need to talk with a consumer law attorney if it's not clear.

Even if this is legal it doesn't sound very consumer friendly. You may want to file a complaint with their regulator, the National Credit Union Administration and copy your Better Business Bureau and the Consumer Financial Protection Bureau.

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