Bank Customers v Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank
Bank Customers Victimized by Alleged Abusive Bank Overdraft Fees Strike Back
Bank customers have filed a series of nationwide class action lawsuits against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank, in the United States District Court for the Southern District of Florida in Miami, for abusive overdraft fees. All cases have been coordinated before the Honorable James Lawrence King.
When customers open checking accounts, banks provide debit cards for the withdrawal of cash from ATM machines and the purchase of goods and services. Many bank customers are not aware that as part of the process of obtaining the debit card, banks automatically enroll their customers in "overdraft protection." The overdraft protection kicks in if the customer spends more than he or she has in the account to cover the purchase, up to a limit of a few hundred dollars.
Plaintiffs charge that banks could simply decline to honor customer ATM or point-of-sale transactions if the account lacks sufficient funds, or could warn customers that if they go
through with the transaction an overdraft fee will be assessed. In fact, until a few years ago, most banks simply declined debit transactions that would overdraw an account.
Plaintiffs also charge that banks do not record charges and purchases on ATM or debit cards in the order they actually occur. Instead, banks reorder the charges and purchases so that the largest charge or purchase is the first one paid by the bank, so as to intentionally designed maximize overdraft fee revenue.
In 2007, banks collected more than $17 billion in overdraft fees. That number nearly doubled in 2008, as more and more consumers struggled to maintain positive checking account balances. In 2009, banks are expected to bring in up to $40 billion in overdraft charges from nearly 50 million customers.
For more information visit www.bank-overdraft.com or contact:
Lieff Cabraser Heimann & Bernstein, LLP
Michael W. Sobol, 415-956-1000
Bruce S. Rogow, 954-767-8909
