Some people file multiple lawsuits against credit unions, hoping to make money by finding small mistakes. These people are called serial plaintiffs. Their lawsuits can be expensive, take a lot of time, and hurt the credit union’s reputation—even if the claims aren’t serious.

One example involves a person who has joined many credit unions across the U.S. and lives in at least two states. This person has filed multiple lawsuits against different credit unions.

Credit unions often get sued over things like:

• Charging overdraft or non-sufficient funds (NSF) fees, sometimes through class action lawsuits.
• Website accessibility problems under the Americans with Disabilities Act (ADA).
• Issues with checking and savings accounts, like scams or misuse of funds.

Serial plaintiffs usually bring the same types of cases repeatedly, not always to fix a real problem, but to get settlement money or legal fees. The goal often seems to be profit, not justice.

Some recent claims against credit unions include:

• Denying or limiting access to services in ways that break their own rules or the ADA.
• Not giving the right notices required under the Equal Credit Opportunity Act (ECOA).
• Breaking rules under the Electronic Funds Transfer Act (EFTA) by not warning members about reduced account access.
• Using unfair or misleading ads, especially about earning reward points on credit cards.

You can read the full alert and risk mitigation tips alert here. (Log-in required)

If you have a question or would like a more detailed consultation on this emerging risk, you can contact Sara Taddeo at staddeo@mddccua.org.

TruStageTM is the marketing name for TruStage Financial Group, Inc. its subsidiaries and affiliates. Corporate headquarters are located in Madison, Wis.