Were You Charged a TD Bank Overdraft Fee?

Those who have been hit with a fee for a TD Bank overdraft may have legal recourse through a Canada-wide investigation to recover unfair overdraft and nonsufficient funds (NSF) fees. 

TD Bank Overdraft Fees

It happens to the best of us. A late deposit, spending a little more than planned, or an unexpected bill can lead to a bank account overdraft and, for some, overdraft fees.

TD Bank customers who find themselves in this situation may be subject to a $35 overdraft fee, according to Go Banking Rates. In addition, TD Bank can assess this fee up to five times a day, potentially leading to $175 a day in fees.

Depending on the type of overdraft protection on an account, TD Bank can do one of three things, Go Banking Rates reported: charge the $35 for each overdraft while covering debit card transactions without a decline, decline one-time debit card purchases while covering and charging an overdraft fee for recurring transactions, or link a customer’s savings and checking accounts to cover overdrafts for a $3 fee.

How to Get a TD Bank Overdraft Refund

TD Bank customers who find themselves with overdraft fees can take certain actions to try and get those fees waived by taking the following steps, according to Go Banking Rates:

• Opt to receive email alerts for when the account goes under a certain dollar amount
• Link a TD Private Tiered Checking account with a savings account
• Open a TD Beyond Checking account, which comes with an overdraft fee reimbursement feature covering two such fees each year

TD Bank Overdraft Settlement

In summer 2020, TD Bank agreed to pay $122 million to settle legal action brought by the U.S. Consumer Financial Protection Bureau (CFPB) over its overdraft fees, CNBC reported. The CFPB accused the bank of illegal overdraft fee practices, including opting customers into a so-called overdraft protection program that allowed the bank to charge additional fees.

Under current U.S. law, banks can charge overdraft fees but have to get permission from their customers to do so, according to CNBC. Customers who do not opt into these overdraft protection programs will simply have their debit cards declined when they attempt to make a purchase that costs more than the amount they have in their account.

TD Bank allegedly did not provide customers this option. Instead, the bank allegedly automatically opted consumers into its overdraft protection program and subjected them to up to $175 a day in overdraft fees.

The CFPB claimed that when consumers signed up with TD Bank, they were presented with an already-checked box offering enrollment in the overdraft protection program. The bank also touted the service as “free” and a “feature” of the account.

While TD Bank refuses to admit any wrongdoing, the CEO said in a statement that the bank had “voluntarily and proactively implemented enhancements” to the overdraft protection program, CNBC reported. The bank will pay $97 million in restitution to nearly 1.5 million customers and a $25 million civil penalty to the CFPB. Further, the bank was ordered to change its overdraft protection program enrollment practices.

Canadian Banks Cash In on Overdraft Fees 

Canadians have been hard hit during the coronavirus pandemic, but major banks, including TD Bank, have managed to hit record profits, according to Radio Canada International. The profits of the six largest banks in Canada, including National Bank of Canada, Royal Bank, BMO, CIBC, Scotiabank and TD, appear to have risen in tandem with increasing bank fees, including overdraft fees.

Banks “gouged out record profits of more than $46 billion in 2019,” Duff Conacher, co-founder of Democracy Watch, told Radio Canada International.

While TD Bank faced legal action on the part of U.S. regulators, Canada’s Financial Consumer Agency called for more research on overdraft fee practices by banks. Meanhwhile, Canadian consumers have filed legal actions over the allegedly unfair or even abusive overdraft practices.

In fact, in a class action lawsuit against nearly a dozen B.C. credit unions, a judge found the overdraft fees charged to customers constituted “criminal interest” under Canada’s Criminal Code.

Joining a Bank Overdraft Class Action Lawsuit

Consumers who have been subjected to overdraft fees within the last five years from Canadian banks, including TD Bank, or credit unions can join an overdraft and NSF fee lawsuit investigation. Submit your information to get your case reviewed by an experienced lawyer for free.

TD Bank customers can band together in a class action lawsuit to hold the bank accountable and potentially be awarded damages or other restitution.

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