SPRINGFIELD — Two Springfield residents, with the help of their attorneys, filed a class action lawsuit against Westfield Bank earlier this month over alleged double-dip overdraft fees.
In a complaint filed Jan. 5, plaintiffs Matthew Levy and Anthony Londret allege that Westfield charges overdraft fees on transactions and then imposes insufficient funds fees on the same transactions. Calling for an end to banks' “abusive and predatory practices,” they said: I need a refund for an incorrect charge.
They allege on multiple charges that the bank breached the contract and violated the Massachusetts Consumer Protection Act, according to court documents. According to the U.S. District Court where the lawsuit was filed, the plaintiffs filed a settlement petition against the bank. It's unclear from court documents how much money they're seeking.
The Republican Party was unable to contact the plaintiff's attorney and was unable to contact the bank's attorney.
The original complaint said the bank's practices were withholding millions of dollars “that were debited from (customer) accounts in violation of Westfield Bank's express contractual commitments.”
Westfield Bank, headquartered in Southwick with locations in western Massachusetts and northern Connecticut, maintains current account balances for immediate use by account holders.
However, when a customer purchases something with a debit card, Westfield Bank sequesters the money needed to pay for that transaction and essentially deducts it from the customer's account. Therefore, funds are not available to customers until the debit card transaction is reconciled.
This problem becomes even more problematic when the customer attempts to make the next transaction. That's because the funds in your checking account have already been removed from your balance, making you more susceptible to overdraft and insufficient funds fees.
This practice is especially harmful to people who live paycheck to paycheck, the complaint says.
It also alleges that until June 2020, the bank's contracts did not clearly state to customers that it would charge multiple fees for a single transaction.
“Consumers likely had no reason to expect this practice, and the practice was not adequately disclosed,” the Consumer Financial Protection Bureau said in a lawsuit complaint.
Prior to 2020, Westfield Bank's contract stated that accounts with negative balances would be charged an overdraft fee, but the overdraft fee was only paid if the account holder had enough money to pay for the transaction. Only if funds are insufficient.
According to court documents, the plaintiffs said all of their experiences with the bank occurred before the contract changes in 2020.
The lawsuit alleges that the bank also engaged in this practice with account holders who had positive balances on approved transactions, meaning they should not have been charged overdraft fees.
Even more damning, the complaint states that Westfield Bank would then “momentarily remove the hold on the transaction funds, return the money to the account (overnight), and then re-debit the same transaction.” Account holders are subject to additional fees.
Lawyers for Mr. Levy and Mr. Londret said Westfield Bank “abused its power over its customers and their bank accounts and acted contrary to their reasonable expectations.”
Levy and Rondoletto are represented by Jonathon Hixon of Hackett Feinberg PC, Sophia Goren Gold of KalielGold PLLC, and David M. Berger of Gibbs Law Group. Westfield Bank is represented by Katherine McKenney and Alyssa Sussman of Goodwin Procter LLP.
