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Armstrong County resident seeks class action status in suit against NexTier Bank

An Armstrong County resident is seeking class action certification of a lawsuit she filed against NexTier Bank that claims the bank improperly and excessively charges overdraft and transaction fees.

Diana Heuser, of Templeton, Armstrong County, filed the suit in Butler County Common Pleas Court and requested the court accept it as a class action on behalf of all of the bank's customers living in Pennsylvania who were assessed the fees.

The suit filed in February claims NexTier charges multiple fees for account overdrafts, charges overdraft fees on debit card transactions when insufficient funds are available to cover the transaction and charges foreign transaction fees on transactions made in the United States.

The bank provided a statement in response to the suit:

“NexTier Bank has taken great pride in providing high-quality banking products and services to our customers and community partners for over 125 years. NexTier Bank always has and continues to comply with all safety and soundness, banking regulations, and consumer protection laws.

“While we can't comment directly about the ongoing litigation, we believe the plaintiff’s claims are without merit and we intend to vigorously defend the lawsuit. NexTier Bank's focus is always on the customers and communities we serve. We strive to communicate directly with our customers to assist them in finding banking solutions that meet their specific needs.”

President Judge S. Michael Yeager granted the company a few extensions to file its response to the lawsuit and the next is due in April.

According to the suit, the bank charges its customers one or more fees for having insufficient funds to cover a transaction and then charges an overdraft fee for the same item.

When an account holder does not have enough money in his or her account to cover a transaction, the bank's contract with customers allows it to pay the transaction and charge a $36 fee or reject the transaction and charge a $36 fee, according to the suit.

Heuser said the bank charged multiple fees on an item on Jan. 5, 2022.

“Unbeknownst to consumers, when defendant reprocesses an electronic payment item, ACH item or check for payment after it was initially rejected for insufficient funds, defendant chooses to treat it as a new or unique item that is subject to yet another fee. But defendant's contract never states that this counter-intuitive and deceptive result could be possible and, in fact, promises the opposite,” according to the suit.

An ACH is an electronic fund transfer made between banks and credit unions across the Automated Clearing House network. ACH is used for all kinds of fund transfer transactions, including direct deposit of paychecks and monthly debits for routine payments, according to the U.S. Consumer Financial Protection Bureau.

In addition, the suit claims NexTier charges overdraft fees on debit card transactions that were authorized with sufficient funds in a practice called “Authorize Positive, Settle Negative Transactions.”

The moment a debit card transaction is made, the bank reduces the customer's checking account balance by the amount of the transaction, sets aside money in the account for the transaction and adjusts the customer's available balance to reflect the subtracted amount. The set aside money is not available to the customer for other purposes and is reserved for the transaction, according to the suit.

In an APSN transaction, the bank charges a $36 overdraft fee when the transaction is settled days later in a negative balance after the customer made other transactions, according to the suit.

APSN transactions only exist because intervening transactions supposedly reduce an account balance. However, the defendant is free to protect its interests and either reject those intervening transactions or charge overdraft fees on those intervening transactions – and it does the latter to the tune of millions of dollars each year, according to the suit.

Heuser said the bank charged her overdraft fees on APSN transactions on Dec. 29, 2021, Jan. 24, 2022 and Aug. 17, 2022.

Heuser also claims the bank charged her a $1.01 foreign transaction fee for a $55.94 online purchase she made from home from an overseas company on Aug. 1, 2022.

She claims in the suit that she interpreted the bank's contract to mean that foreign transaction fees are only charged when the account holder is outside of the United States.

The suit accuses NexTier of breach of contract, unjust enrichment and violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law.

Relief sought in the suit includes certification to proceed as a class action, designation of Heuser as class representative and her attorney as class counsel, restitution of the fees in question, declaring that NexTier's fee practices and policies are inconsistent with the contract, enjoining NexTier from using those practices, unspecified damages and reimbursement of litigation costs. Heuser is also seeking a jury trial.

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