Strategic Connections: Public Relations Strategy on the Growing Threat of Overdraft Fee Lawsuits Against Wisconsin’s Community Banks

By Kathleen Rolfs

Are Recent Social Media Ads Scams or Legitimate?
Small community banks across the nation are increasingly becoming targets of aggressive law firms seeking to initiate overdraft fee lawsuits. Utilizing sophisticated digital advertising tactics, these firms entice our customers to contact a law firm if they were charged overdraft fees, likely in exploration of the possibility of a class action lawsuit. While these ads are legitimate, they typically employ ambiguous terms like “investigation” which may lead your customers to come to you with questions as to their nature. This year alone, the Wisconsin Bankers Association (WBA) has reported that many community banks in Wisconsin have been subjected to such targeted campaigns. This issue not only creates challenges for banks’ marketing communications teams but also poses a significant public relations risk to Wisconsin consumers by potentially undermining trust in the banking system.

Why Is This an Increasing Problem?
According to data from Bankrate, roughly 91% of banking accounts are subject to overdraft fee structures, with this information disclosed to customers at account opening with transparent fee schedules. Recent increased media coverage on the topic has prompted some lawyers to prospect for new customers, hoping to find bank and credit union customers who may have charged their customers improperly. Some are prospecting through paid social media advertising campaigns that target consumers in the geographic area of a bank’s location. These ads are inexpensive and have a wide reach.

Should These Ads be Reported and Treated as Scams?
Some bankers incorrectly dismiss these aggressive solicitations as mere scams, viewing them as attempts by “bad actors” to obtain personal information from bank clients. However, it is best not to shrug off these ads targeting Wisconsin banks simply as scammers’ attempt to collect information. These craftily planned advertisements represent legitimate attempts to build relationships with our customers with the end goal being a possible lawsuit. WBA Director – Legal Scott Birrenkott recently shared that some Wisconsin banks have received information requests from law firms working with customers who have responded to their advertising.

If your bank is targeted by this type of ad — and if it hasn’t been yet, it likely will be — it is crucial to be prepared. Clear communication, customer education, and proactive networking can help mitigate the impact of these campaigns.

How to Handle a Campaign Targeting Your Customers
While the actual response of each individual bank will depend upon what is appropriate for your situation, and your customer base, here are some elements to consider:

1. Transparency: Ensure your employees understand your bank fee schedule. Communicate your bank’s policies and the rationale behind them. If appropriate, consider sharing the details of any ad campaigns targeting your bank with your staff to ensure that they are aware of it because they may be asked about it when they are out in the community and may receive inquiries from customers by phone and in-person visits. Alternatively, it might be best to ignore addressing the advertisements directly, and instead focus on an independent, yet proactive educational campaign focusing on how to learn more about your bank’s overdraft services.

2. Education: Educate your customers on overdraft fees and what they can do to avoid them. In addition to providing this education at account opening, create statement stuffers or flyers with information to insert into overdraft notices that include tips on how to avoid these unnecessary fees and links to internal and external resources.

3. Networking: Collaborate with other community banks and WBA to share best practices and strategies. If you happen to notice an ad targeting other banks, let them know, even if they are your competitor. Report campaigns impacting your bank to the WBA legal team as they are monitoring these ads and have been in communication with the Wisconsin Department of Financial Institutions, Wisconsin Department of Justice, and Wisconsin Department of Agriculture, Trade, and Consumer Protection regarding the potential misrepresentations these advertisements suggest regarding bank overdraft practices.

4. Check the Meta Ad Library: If you start seeing ads, check the ad library under Meta’s page transparency feature so that you can see the campaign beginning and end dates. It seems recently that the firms run the ads for a five-day run starting over the weekend, most likely to catch the bank off guard during the weekend.

With this issue being at the top of the CFPB’s agenda, it isn’t going away any time soon. It is incumbent upon us as community bankers to keep abreast of bank policy issues that are discussed in the media and to be prepared for the fallout. Awareness, education, and communication are key to ensure we effectively protect our reputation. And it’s always a good idea to let WBA know if you are targeted by these law firms so that they can continue to provide strategic resources to support us and advocate on our behalf.

Rolfs, vice president – chief marketing & communications at PremierBank in Fort Atkinson, is a member of the 2024–2025 WBA Marketing Committee.