What is an NSF Fee? It’s a fee your bank or credit union charges you when you do a transaction without enough funds in your account to pay for the transaction. A debit card transaction or a bad check transaction are the most common types of transactions where you could end up with an NSF Fee.

NSF Fee is a shorthand term for insufficient funds fee, non-sufficient funds fee, insufficient funds, and returned item fee. These are all different names for the same type of fee. Your bank probably uses one of these terms on your statement when it charges you the fee.

What Can you Do About NSF Fees?

The first step is to keep an eye on the balance in your account and make sure you don’t create charges that will take your account into negative balance territory. You could also choose to opt into your bank or credit union’s overdraft protection program. If you opt into overdraft protection your bank will pay for some of your transactions made when your account has a negative balance. However, they will then charge you an overdraft fee, which might be more than the insufficient funds fee you were trying to avoid.

If you’ve been charge NSF fees that you think were improper you have a couple options. You could contact your bank and try to get them to waive the fees. They might do this once or twice if you’re a good, longtime customer and you have some kind of explanation for why the fees were improper. But they probably won’t waive many of these charges.

Another option, if the fees were charged wrongly, is to contact us so we can bring a legal action against the bank on your behalf.

When are NSF Fees Illegal?

NSF Fees are legal for banks to charge. However, they may be improper or deceptive if the bank charges them in certain ways. If so, you can bring a lawsuit against the bank for their deceptive fees. Here are the main ways NSF fees may be wrongfully charged.

  • If your bank charges you multiple NSF fees for the same transaction;
  • If your bank reorders your transactions in a way that lets them charge you more NSF fees. This means that the bank processes your transactions, debits and credits out of the order you made them in. By doing this, the bank may be able to increase how many NSF fees it charges you;
  • If your bank rejects a transaction, charges you an NSF, and then retries the transaction, pays for it and charges you an overdraft fee in addition to the NSF fee.

NSF Fees Class action lawsuit

Often the best way to hold banks and credit unions responsible for their deceptive fees is by filing a class action lawsuit. For instance, Bank of America recently settled a large class action lawsuit for their NSF fee and overdraft fee practices.

We are actively investigating many banks and credit unions for their deceptive fees and charges. If you’re interested in joining a bank class action lawsuit or having us review the NSF and overdraft fees you’ve been charged, then contact us today.


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