Atlantic Union to Refund Consumers $5M In Overdraft Fees

Atlantic Union Bank must refund at least $5 million to people who were illegally enrolled in checking account overdraft programs, the CFPB says.

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 The Consumer Financial Protection Bureau (CFPB) has ordered Atlantic Union Bank to refund at least $5 million in illegal overdraft fees to consumers and pay a $1.2 million penalty to the CFPB’s victims relief fund.

The CFPB alleges that, from 2017 to 2020, the bank illegally enrolled thousands of customers in checking account overdraft programs, misleading those who enrolled by phone about the terms and costs of overdraft coverage. Atlantic Union's employees also failed to clearly explain which transactions were covered by the overdraft coverage and, in some cases, omitted key information about the service cost, including the possibility of a "hefty" overdraft fee for each transaction, according to the CFPB.

Atlantic Union denies any wrongdoing.

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“We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law,” Atlantic Union CEO John Asbury said in a statement. “Nonetheless, we believe it is in Atlantic Union’s best interest to settle this matter so we can continue focusing on providing the products, services and support our customers want.”

The bank also said that it made improvements to its overdraft program, including the opt-in overdraft service at issue, before the recent settlement.

CFPB Director Rohit Chopra said in a statement that the bank "harvested millions of dollars in overdraft fees through a host of illegal practices."  He added that people are "fed up with junk fee scams, and the CFPB will continue its work to ensure families are treated fairly.”

The Biden administration has been targeting junk fees in the banking sector as well as other industries, claiming that hidden fees cost Americans billions.

Last year, the CFPB ordered Regions Bank to pay $191 million, including $141 million to customers, for illegal "surprise" overdraft fees.

The agency has ordered Atlantic Union to submit a plan by next month that lays out how it will identify affected consumers and the amounts they are owed in redress. The bank must also provide a plan on how it will contact these consumers.

Submit a complaint to the CFPB

The CFPB encourages consumers to submit complaints about financial products or services, including checking and savings accounts, credit cards, debt collection, mortgages, payday loans, student loans and much more.

To submit a complaint, visit the CFPB’s website or call 855-411-CFPB (2372).

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Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.