SPRINGFIELD — With the help of their attorneys, two Springfield residents filed a class action lawsuit against Westfield Bank earlier this month for its allegedly double-dipping on overdraft fees.
In the complaint filed on Jan. 5, plaintiffs Matthew Levy and Anthony Rondoletto say that Westfield Bank’s “abusive and predatory practice” of charging overdraft fees on transactions, and then charging insufficient funds fees on those same transactions, needs to stop, and that they required refunds for the improper charges.
They say in multiple charges that the bank breached contract and violated the Massachusetts Consumer Protection Act, court documents said. The plaintiffs have filed a motion for a settlement with the bank, according the U.S. District Court, where the lawsuit was filed. It is not clear from court documents how much money they’re seeking.
The Republican was not able to reach the plaintiffs’ attorneys, nor was it able to reach the bank’s attorneys.
The original complaint said that the bank’s practices withheld millions of dollars that were “bilked from (customers’) accounts in violation of Westfield Bank’s clear contractual commitments.”
Westfield Bank — which is based out of Southwick, has locations in Western Massachusetts and northern Connecticut — maintains running account balances for account holders for immediate use.
However, when a customer purchases something with a debit card, Westfield Bank sequesters the money needed to pay for that transaction — essentially subtracting it from the customer’s account. The funds, therefore, are not available for the customer to use, until their debit card transactions reconcile.
This becomes even more of a problem when a customer tries to make a subsequent transaction, because the money from their checking account already has been removed from their balance, leaving them vulnerable to an overdraft fee and to an insufficient funds fee.
This practice is especially harmful to those who live paycheck to paycheck, the lawsuit states.
It also alleges that, until June 2020, the bank’s contracts did not clearly state to its customers that they charge multiple fees on a single transaction.
“Consumers likely had no reason to anticipate this practice, which was not appropriately disclosed,” the Consumer Financial Protection Bureau said in the lawsuit allegations.
Before 2020, Westfield Bank’s contract stated that it will charge an overdraft fee for accounts with negative balances, but it only will pay overdrafts when an account holder lacks sufficient funds to pay for a transaction.
The plaintiffs said that both of their experiences with the bank occurred before the contracts were changed in 2020, court documents showed.
The lawsuit alleges that the bank was using this practice even for account holders who had positive balances — for transactions that were authorized — meaning they should not have been charged an overdraft fee.
More egregious, the lawsuit states that Westfield Bank would then “release the hold placed on funds for the transaction for a split second, putting money back into the account (during the night), then re-debit the same transaction a second time,” incurring yet another fee for the accountholder.
Westfield Bank “abuses power it has over customers and their bank accounts, and acts contrary to their reasonable expectations,” Levy and Rondoletto’s attorneys said.
Attorneys Jonathon Hixon of Hackett Feinberg PC, Sophia Goren Gold of KalielGold PLLC, and David M. Berger of Gibbs Law Group are representing Levy and Rondoletto. Katherine McKenney and Alyssa Sussman of Goodwin Procter LLP are representing Westfield Bank.
