SPRINGFIELD — With the help of their attorneys, two Springfield residents filed a class-action lawsuit against Westfield Bank earlier this month over its alleged double-dipping in overdraft fees.
In the complaint filed Jan. 5, plaintiffs Matthew Levy and Anthony Rondoletto say Westfield Bank’s “abusive and predatory practices” of charging overdraft fees on transactions, and then charging insufficient funds fees on those same transactions, must stop, and that they are seeking refunds. For inappropriate charges.
On multiple counts, they say the bank breached contract and violated the Massachusetts Consumer Protection Act, court documents said. The plaintiffs filed a request to settle with the bank, according to the U.S. District Court, where the lawsuit was filed. It is not clear from court documents how much money they are asking for.
The Republican was unable to reach the plaintiffs’ lawyers, nor was he able to reach the bank’s lawyers.
The bank’s practices withheld millions of dollars that were “defrauded from (customers’) accounts in violation of Westfield Bank’s clear contractual obligations,” the original complaint said.
Westfield Bank, which is headquartered in Southwick, with locations in western Massachusetts and northern Connecticut, maintains checking account balances for account holders for immediate use.
However, when a customer buys something using a debit card, Westfield Bank withholds the funds needed to pay for that transaction – essentially subtracting it from the customer’s account. Hence, the funds are not available for the customer to use, until their debit card transactions are settled.
This becomes a bigger problem when a customer tries to make a subsequent transaction, because the funds from their checking account have already been removed from their balance, leaving them vulnerable to overdraft fees and non-sufficient funds fees.
The lawsuit states that the practice is especially harmful to those who live paycheck to paycheck.
It also alleges that until June 2020, the bank’s contracts did not clearly state to its customers that they were charging multiple fees on a single transaction.
“Consumers likely had no reason to expect this practice, which was not adequately disclosed,” the Consumer Financial Protection Bureau said in the lawsuit’s allegations.
Before 2020, Westfield Bank’s contract stipulated that it would charge overdraft fees on accounts with negative balances, but would only pay an overdraft when the account holder lacked sufficient funds to pay for the transaction.
The plaintiffs said their experiences with the bank occurred before the contracts changed in 2020, court documents showed.
The lawsuit alleges that the bank was using this practice even for account holders with positive balances — for authorized transactions — meaning they should not have been charged overdraft fees.
Even more egregiously, the lawsuit states that Westfield Bank would then “release the hold on the funds for the transaction for a split second, return the funds to the account (overnight), and then debit the same transaction again.” Other fees incurred to the account holder.
Lawyers for Levy and Rondoletto said Westfield Bank “abuses the power it has over customers and their bank accounts, and acts contrary to their reasonable expectations.”
He is represented by attorneys Jonathan Hickson of Hackett Feinberg PC, Sofia Goren Gold of KalielGold PLLC, and David M. Berger of Gibbs Law Group, Levy & Rondoletto. Westfield Bank is represented by Katherine McKinney and Alyssa Sussman of Goodwin Procter LLP.