A class action lawsuit filed in October 2023 alleges that Fifth Third Bank systematically charged overdraft fees on debit card transactions that were already authorized and covered by sufficient funds at the time of purchase. According to the complaint brought by plaintiffs Christy Hunter of Georgia and Feon Smith-Branch of West Virginia, the bank would approve a transaction, immediately earmark the funds from a customer’s available balance, and then retroactively slap an overdraft fee on that same transaction if later, unrelated purchases pushed the account into the negative. The lawsuit, filed in U.S. District Court in Cincinnati, Ohio, calls these fees “crippling” and “unconscionable,” accusing the bank of using them to “gouge” customers. Consider a straightforward example: a customer with $200 in their account swipes their debit card for a $50 grocery purchase.
The bank authorizes it, deducts $50 from the available balance, and the transaction goes through without issue. Later that day, other charges bring the balance below zero. Fifth Third then circles back and charges a $37 overdraft fee on that original $50 grocery purchase — even though the customer had plenty of money to cover it at the time. At $37 per occurrence and up to three fees per day, a customer could face $111 in daily overdraft charges.
Table of Contents
- How Did Fifth Third Bank Allegedly Charge Overdraft Fees on Transactions Authorized With Sufficient Funds?
- What Is Fifth Third Bank’s Current Overdraft Fee Structure?
- What Happened to the 2023 Class Action Lawsuit?
- How to Check Whether You Were Affected by Fifth Third’s Overdraft Practices
- Fifth Third Bank’s Broader Regulatory Troubles
- Fifth Third’s History of Overdraft and Fee Settlements
- What Comes Next for Overdraft Fee Regulation
- Frequently Asked Questions
How Did Fifth Third Bank Allegedly Charge Overdraft Fees on Transactions Authorized With Sufficient Funds?
The core allegation in the lawsuit centers on a gap between authorization and settlement — two distinct steps in how debit card transactions are processed. When a customer uses their debit card, the bank checks whether the account has sufficient funds, authorizes the transaction, and immediately reduces the available balance by that amount. The money is effectively spoken for. But the actual settlement of the transaction — when the merchant formally claims the funds — can happen hours or even days later. According to the plaintiffs, Fifth Third exploited this window by assessing overdraft fees on authorized transactions during the settlement phase if other intervening transactions had drained the account.
The lawsuit also alleges that Fifth Third manipulated the posting order of transactions, processing them from largest to smallest rather than in chronological order. This practice, sometimes called transaction resequencing, can maximize the number of smaller transactions that trigger overdraft fees. If a customer makes five small purchases of $10 each and one large purchase of $150, processing the $150 first drains the account faster, potentially causing multiple smaller transactions to each incur a separate $37 fee. Chronological processing, by contrast, might result in only one or two overdraft charges. This is not a new accusation against Fifth Third — a prior class action from roughly 2010-2011 addressed the same resequencing practice, resulting in a $9.5 million settlement fund for customers who incurred overdraft fees on debit card transactions between October 21, 2004 and July 1, 2010.
What Is Fifth Third Bank’s Current Overdraft Fee Structure?
As of 2025, Fifth Third Bank charges $37 per overdraft — one of the highest fees in the banking industry. Many major banks have been reducing or eliminating overdraft fees in response to regulatory pressure and public backlash, but Fifth Third’s fee remains steep. The bank permits up to three overdraft fees per day, creating a maximum daily exposure of $111. For customers living paycheck to paycheck, a single bad day of transactions can generate fees that exceed the cost of the purchases themselves. Fifth Third does offer some limited protections. The bank will not charge an overdraft fee if the account is overdrawn by $5 or less, and individual transactions of $5 or less are also exempt.
Additionally, Fifth Third offers an “Extra Time” feature on its Momentum Checking accounts, which gives customers a brief window to deposit funds before fees are assessed. However, these protections have significant limitations. The $5 threshold is low enough that most real-world transactions will exceed it, and the Extra Time feature is only available on one specific account type. If you hold a standard checking account, you do not get that grace period. Customers who rely on the $5 exemption should also be aware that it applies to the overdrawn amount or the individual transaction size — not both. Multiple small transactions that individually fall under $5 but collectively overdraw the account by more than $5 could still trigger fees.
What Happened to the 2023 Class Action Lawsuit?
The trajectory of the Hunter and Smith-Branch lawsuit is not entirely clear from public records. In January 2024, Law360 reported that two Fifth Third checking account holders voluntarily dropped proposed class action overdraft claims. Whether this report refers specifically to the Hunter/Smith-Branch case or to a related action is uncertain. Voluntary dismissals in class action litigation do not necessarily mean the claims lacked merit — plaintiffs sometimes drop cases due to settlement negotiations, strategic shifts, or procedural reasons that are not disclosed publicly.
What is clear is that Fifth Third’s overdraft practices continue to draw scrutiny. On August 28, 2025, a U.S. Senate letter was sent to Fifth Third CEO Tim Spence regarding the bank’s overdraft practices, indicating that Congressional attention to the issue has not faded. When federal legislators are directly contacting a bank’s chief executive about a specific practice, it signals that regulatory or legislative action could follow. Customers who believe they were charged overdraft fees on transactions that were authorized with sufficient funds should keep detailed records of their account statements, as future litigation or regulatory remedies may require documentation of specific charges.
How to Check Whether You Were Affected by Fifth Third’s Overdraft Practices
If you are or were a Fifth Third Bank customer, there are practical steps you can take to determine whether you were charged overdraft fees on transactions that should have been covered. Start by reviewing your bank statements for any month where you were charged overdraft fees. Look specifically for debit card transactions where your available balance at the time of the purchase was sufficient to cover the charge. Your statement should show the authorization date and the posting date — if these differ, and fees were assessed at posting despite available funds at authorization, that pattern matches the conduct alleged in the lawsuit. Compare this to how some other banks handle the same situation.
Several large banks, including Capital One and Ally, have eliminated overdraft fees entirely. Others, like Bank of America, have reduced fees to $10 and capped the number of daily charges. The tradeoff for customers considering a switch is that fee-free banks may offer fewer branch locations or services, while banks like Fifth Third maintain an extensive branch network across the Midwest and Southeast. Whether convenience justifies the fee risk is a calculation each customer has to make for themselves. If you determine you were affected, document everything and consult with a consumer protection attorney, as individual claims may still be viable even if a particular class action has been dismissed.
Fifth Third Bank’s Broader Regulatory Troubles
The overdraft fee controversy is not Fifth Third’s only legal headache. On July 9, 2024, the Consumer Financial Protection Bureau (CFPB) filed a stipulated judgment requiring Fifth Third to pay a $15 million civil money penalty. This action was related to unauthorized account openings and forced-placed auto insurance — not overdraft fees directly — but it paints a broader picture of a bank that has faced repeated allegations of putting revenue extraction ahead of customer interests. As part of that enforcement action, Fifth Third was also ordered to repay roughly 35,000 consumers who were charged more than $12.7 million in unnecessary fees for forced insurance products they never needed.
The warning here is that overdraft fees may not be the only questionable charges on your Fifth Third account. Customers should audit their accounts for insurance charges they did not request, fees for services they did not authorize, and any other line items that do not correspond to actual account activity. A pattern of regulatory enforcement actions against a single institution should heighten your scrutiny of every charge. However, it is worth noting that the 2024 CFPB action resulted in a consent order, not a finding of liability — Fifth Third did not formally admit wrongdoing, which is standard in such settlements.
Fifth Third’s History of Overdraft and Fee Settlements
Fifth Third has paid out significant sums in prior class action settlements related to fee practices. The circa 2010-2011 settlement established a $9.5 million fund for customers who incurred overdraft fees on debit card transactions between October 21, 2004 and July 1, 2010, specifically due to transaction resequencing.
Eligible class members in that case received payments of up to three times the overdraft fees they paid during any continuous 45-day period. Separately, Fifth Third paid $5.2 million to settle a class action over ATM fee practices, handled by the firm Tycko & Zavareei LLP. These prior settlements demonstrate that courts and regulators have found Fifth Third’s fee practices problematic before — and that affected customers can receive meaningful compensation when claims are pursued.
What Comes Next for Overdraft Fee Regulation
The combination of class action litigation, CFPB enforcement, and Congressional scrutiny suggests that Fifth Third and similar banks face an increasingly hostile environment for high overdraft fees. The August 2025 Senate letter to CEO Tim Spence is particularly notable because it represents the most recent escalation — legislative bodies are now directly engaging bank executives, which often precedes formal hearings or proposed legislation.
The broader banking industry trend is unmistakably toward lower or eliminated overdraft fees, driven by both competitive pressure and regulatory action. Fifth Third’s $37 fee stands out as an outlier among large banks, and that visibility makes it a likely target for further action. Whether relief comes through new litigation, regulatory rulemaking, or market competition, customers who have been charged overdraft fees on previously authorized transactions should stay informed and retain their account records.
Frequently Asked Questions
Can I still file a claim related to Fifth Third Bank’s overdraft fees?
As of now, there is no active open settlement with a claims process for the 2023 overdraft lawsuit. The prior $9.5 million settlement covered transactions between October 2004 and July 2010, and that claims period has closed. However, if new litigation results in a settlement, affected customers would be notified of the claims process. Retain your account records in the meantime.
How much does Fifth Third charge per overdraft fee?
Fifth Third charges $37 per overdraft fee, with a maximum of three fees per day, totaling up to $111. The bank does not charge a fee if the account is overdrawn by $5 or less, or on individual transactions of $5 or less.
What is transaction resequencing and why does it matter?
Transaction resequencing is the practice of processing transactions from largest to smallest rather than in chronological order. This can drain an account balance faster and cause more small transactions to trigger individual overdraft fees. Fifth Third previously settled a class action over this practice for $9.5 million.
Did the CFPB take action against Fifth Third for overdraft fees?
The CFPB’s July 2024 enforcement action against Fifth Third involved unauthorized account openings and forced-placed auto insurance, not overdraft fees specifically. That action resulted in a $15 million penalty and restitution to roughly 35,000 consumers. Overdraft fee practices have been addressed through private class action litigation and Congressional inquiry rather than direct CFPB enforcement to date.
Should I switch banks to avoid overdraft fees?
Several major banks have eliminated overdraft fees entirely, including Capital One and Ally. Others have reduced fees significantly. The tradeoff is that fee-free banks may offer fewer in-person services. Evaluate your banking needs and fee exposure before deciding.