SHARON, Mass.–The $1.29-billion Sharon & Crescent Credit Union has agreed to pay $725,000 to settle a class action lawsuit for allegedly assessing improper overdraft fees on debit card transactions and multiple NSF fees on resubmitted ACH transactions.
The settlement also includes forgiveness of certain outstanding fees on charged-off accounts, according to ClaimDepot.com.
Similar to litigation that has targeted other credit unions, the class action lawsuit alleged that Sharon & Crescent United Credit Union improperly charged overdraft fees on debit card transactions that were authorized with a positive balance but settled with a negative balance, and assessed multiple NSF fees on resubmitted ACH transactions, according to ClaimDepot.com.
Plaintiffs claimed these practices violated account agreements and the Massachusetts Consumer Protection Act. SCU Credit Union denies these allegations but has agreed to settle to avoid the expense and risk of continuing litigation, the report added.
The Criteria
According to ClaimDepot.com, class members must meet the following criteria:
- They had a personal or business checking account with SCU Credit Union at any time between Dec. 7, 2016 and April 18, 2023.
- The settlement includes both current and former account holders.
- They were charged at least one overdraft fee for a debit card transaction that was authorized when their account had a positive balance but settled with a negative balance (referred to as “APPSN Fees”) during this period.
- Or, they were charged at least one NSF fee for an automated clearinghouse (ACH) transaction that was resubmitted after an initial decline (referred to as “Representment Fees”) between Dec. 7, 2016 and October 31, 2021.
Balance Reductions
Class members with a charged off account will have their account balance reduced by the total amount of qualifying fees charged. Class members do not need to submit a claim in order to receive a payment or forgiveness. Former account-holders will have a check mailed to the address the credit union has on file, ClaimDepot.com said.
How Funds are Divided
According to the report, the settlement fund of $725,000 will include:
- Settlement administration costs: To be determined
- Attorneys’ fees: Up to $241,642.50
- Attorneys’ litigation costs: To be presented to the court for approval at a later date
- Service award to class representative: $5,000
- Payments to class members: Remaining settlement funds
Forgiveness of qualifying charged-off account overdraft and NSF fees is separate from the $725,000 settlement fund, the report added.