Are Chargeback Fees OK?

Answered by:

Question:

If a customer deposits a check into their account with us, and that check is returned to us as unpaid, may we charge them a fee when we do the chargeback?

Answer:

Not anymore. In October 2023 the CFPB addressed such fees in their “Supervisory Insights Junk Fees Update Special Edition”. They identified these fees as “Surprise Depositor Fees” previously saying in late 2022 that “it is likely an unfair act or practice for an institution to have a blanket policy of charging return deposit item fees anytime that a check is returned unpaid, irrespective of the circumstances or patterns of behavior on the account.”

The CFPB goes on to say that they are looking for the fee in institutions they examine, and most have eliminated returned deposit item fees entirely. They will continue to monitor and may “direct remediation from institutions that continue charging unfair returned deposit item fees.”

Join the upcoming 90 minute webinar “Junk Fee Crack Down” on Tuesday, April 30, 2024 to learn more!
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Learn more about Rebekah Leonard’s
Junk Fee Crack Down
webinar.