At some banks, there's a nasty little piece of language buried in those terms-and-conditions agreements you have to sign. It says that if there are any legal disputes over your account, and the bank ends up incurring costs -- like attorney fees, for example -- you're the one who's going to have to pay them.
The Los Angeles Times has a thorough explanation of this fine-print phenomenon, which researchers for the Pew Charitable Trusts found in customer agreements at HSBC Bank, TD Bank, PNC Bank and Branch Banking & Trust Co., as well as America First Credit Union.
It's not as though banks have no reason to worry about a customer taking them to court. Banks have been involved in all sorts of lawsuits in recent years, for transgressions as minor as missing a $26 deposit and as serious as mixing up one customer's account with another or mistakenly declaring a customer dead. Sometimes you beat the bank, sometimes you don't.
According to consumer advocates quoted in the LAT, it's unlikely that a court would actually uphold the provision and force a customer to pay her bank's legal fees. But just the fact that the language is included in the agreement could cause customers to think twice before bringing litigation against their banks, which may be the point.
One of the more common subjects of dispute lately has been the issue of excessive overdraft fees -- something that arises when, for example, banks shuffle around the order of a customer's debit-card transactions in a way that allows the bank to charge extra penalties.
That's been a billion-dollar practice for banks, but it's also brought plenty of legal trouble from irate customers. Three of the banks with the protective language in their account agreements -- HSBC, PNC Bank and TD Bank -- have been sued in the past by customers claiming they were hit with excessive overdraft charges.
It's not clear whether the plaintiffs in those cases were ordered to pay their banks' legal fees.
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