I have a closed account from one bank due to overdraftfees, after I was assured by the bank manager that I would not receive them. I now have a prepaid card that I use for bill pay, which recently had an unauthorized transaction of $85 from the first bank. Is this legal?
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When you left the former bank with an overdraft balance, you left a debt owed. You may have a defense to paying that overdraft based on what you have said in your question, but whether your defense would have any merit, cannot be said.
Whether or not the deduction from your prepaid card balance by the other bank is legally sanctioned will depend on the laws of your state and the method used by the bank to obtain those funds. We simply don't know enough about the facts to offer an opinion.
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When you left the former bank with an overdraft balance, you left a debt owed. You may have a defense to paying that overdraft based on what you have said in your question, but whether your defense would have any merit, cannot be said.