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Legality of Bank Inactivity Fees

Personal Finance & Money Asked on April 4, 2021

I hadn’t been paying attention to my checking account (in which I kept a minimum balance
of $1500 just to avoid a monthly "maintenance fee") for about a year. But, yesterday I
logged in and found that it had incurred a $5 "dormant fee" in each of the last 4 months.
I newly learned that a checking account becomes "dormant" after 11 months without activity.
This bank is in Washington state in USA.

I could have avoided the fees simply by moving $5 from my checking account into my savings
account.

It frustrates me that they never even sent an email to me (before or after any of the fees).

Is this really legal in USA?

In court, I would argue that the bank actually benefits from my inactivity.
Accounting is easier and, for a given total balance, they would actually prefer
to have inactive customers for more stable loaning. They simply did not provide
anything, or incur any extra difficulty, to justify a fee.

It is clear that they are taking advantage of fine print that no one ever reads,
about a fee that the customer does not naturally expect. I consider this to be
morally wrong, but wondering here if a class action lawsuit is likely to win or lose.

One Answer

The legal aspect is better suited for https://law.stackexchange.com, but It's probably "legal" because you signed an agreement when you opened the account that detailed the charge. They aren't "damages" that you can argue aren't appropriate, so they don't have to justify it.

However, you might get them to refund the fees if you threaten to move your money elsewhere. They may rather refund part of all of those fees to keep you as a customer. Or, they may not, if you aren't a big enough fish to worry about. In that case, you have a choice: stay with them and know that you have to keep a minimum balance (or rearrange your balances) or move to one of the dozens of "free" banks that exist without these types of fees (or at least fees that don't apply to you).

A lawsuit is going to cost you way more than the $20 you're out in fees.

Answered by D Stanley on April 4, 2021

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