NEW YORK (Legal Newsline) - Popular Community Bank faces a lawsuit over its "unfair and unconscionable" overdraft fees.
Plaintiff Frankie Lipsett filed the lawsuit May 13 in New York federal court against Banco Popular North America, complaining his checking account contract stipulates overdraft fees will only be charged on transactions on which there are insufficient funds to cover but customers have still been taken for millions of dollars.
"Here is how it works," the lawsuit says. "At the moment debit card transactions are authorized on an account with positive funds to cover the transaction, Banco Popular immediately reduces accountholders' checking accounts for the amount of the purchase, sets aside funds in a checking account to cover that transaction, and as a result, the accountholder’s displayed 'available balance' reflects that subtracted amount.
"As a result, customers’ accounts will always have sufficient available funds to cover these transactions because Banco Popular has already sequestered these funds for payment.
"However, Banco Popular still assesses crippling OD Fees on many of these transactions and mispresents its practices in its Account Documents."
Reese LLP and Kaliel Gold are the firms representing the plaintiff.