NBT Bank settlement over improper overdraft fee charges
NBT Bank, N.A. has agreed to pay $5.7 million to settle a class action lawsuit alleging the bank improperly charged its customers overdraft fees. The settlement provides both direct cash payments and forgiveness of certain outstanding fees, offering relief to thousands of consumers who banked with NBT between December 4, 2013 and November 30, 2021.
Settlement details
Under the settlement terms:
- $4.25 million will be distributed to eligible customers in cash
- $1.5 million in outstanding overdraft charges will be forgiven
- Class members will not need to prove they were harmed in order to receive a share
- Payments will be automatically calculated using existing NBT account data
Two categories of overdraft fee charges are being addressed:
- Approximately $2.9 million will be allocated to customers who were charged overdraft fees on “Authorize Positive, Purportedly Settle Negative Transactions”
- Roughly $1.3 million will go to those who were charged overdraft fees on transactions where they had insufficient funds
Current account holders will see credits applied directly to their accounts, while former customers will receive checks.
Allegations against NBT Bank
The lawsuit, filed in 2019 by plaintiff Christopher Lowe, accused NBT Bank of engaging in unfair and deceptive practices. According to the complaint, the bank not only charged overdraft fees when customers had insufficient funds but also:
- Repeatedly charged overdraft fees on the same transaction if it was resubmitted after being initially rejected
- Violated the promises made in its own customer contracts
- Acted in ways that plaintiffs alleged were deceptive, unfair, and unconscionable, violating New York consumer protection law
This settlement comes the same month the Consumer Financial Protection Bureau (CFPB) announced its intent to crack down on financial institutions that rely heavily on overdraft fees.
KalielGold’s role in securing justice for overdraft fees
The class was represented by a team of experienced consumer protection attorneys, including Jeffrey D. Kaliel and Sophia G. Gold of KalielGold PLLC. KalielGold has a strong track record of challenging unfair banking practices on behalf of consumers nationwide.
By working alongside other leading firms, KalielGold played a key role in achieving this multi-million-dollar result, holding NBT Bank accountable and ensuring that customers receive meaningful relief.
What this means for consumers
Consumers affected by the settlement will automatically receive their portion, with no need to file a claim or prove financial harm. This ensures that the relief is both broad and accessible to all eligible class members.
The case is also another important step in curbing predatory overdraft fee practices that have impacted millions of Americans. With regulatory agencies and consumer attorneys working together, banks may face greater scrutiny for how they handle customer transactions.
Were you charged an overdraft fee?
KalielGold is dedicated to fighting unfair financial practices and protecting consumers across the country. If you believe you were unfairly charged overdraft fees by your bank, you may have legal options.
Contact KalielGold PLLC today to learn more about your rights and how we can help.
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