Judge James Lawrence King of the U.S. District Court has denied motions
made by several of the country’s top banks to derail consolidated
federal lawsuits in a federal court in Miami. The lawsuits allege that
the banks wrongfully collected hundreds of millions of dollars in overdraft
fees on consumer debit card purchases through a transaction reorganization scheme.
Judge King wrote in a 50-page opinion that Citibank, U.S. Bank, Bank of
America, JPMorgan Chase, Wells Fargo, and Wachovia, among others, were
not entitled to a dismissal of complaints. While the banks initially argued
that customer should not be able to bring private litigation in order
to recover excessive overdraft fees, the judge concluded that the plaintiffs
brought forth sufficient evidence to suggest that the banks were acting
in bad faith. The lawsuits accuse the banks of manipulating the order
of transactions in order to maximize the number of overdraft fees charged
According to the plaintiffs, the collection of overdraft fees, usually
at between $30 and $35 each, impacts millions of Americans annually, often
creating a domino effect of even more fees that harms the most vulnerable
consumers. Although Bank of America has announced that they will no longer
charge overdraft fees on debit transactions, this change is belated.
What is Overdraft Protection?
Today, when customers open checking accounts, they are provided with debit
cards. Rather than declining a purchase when the customer’s account
contains insufficient funds, the customers are automatically enrolled
in “overdraft protection” up to a few hundred dollars. Instead
of having a purchase declined, customers who overdraw their accounts are
assessed a fee. The problem is that these banks have not been ordering
transactions chronologically, but by amount, with the largest transaction
listed first. This way, the customer overdraws multiple times for multiple
smaller transactions, costing them more in fees.
The complaints were filed in the United States District Court for the Southern
District Court of Florida in Miami before Judge King. Plaintiffs'
lead counsel Bruce Rogow and Robert C. Gilbert work with a Plaintiffs
Executive Committee comprised of the law firms of Golomb & Honik,
P.C., Baron & Budd, Podhurst Orseck P.A., Lieff Cabraser Heimann &
Bernstein, LLP, and Trief & Olk, Webb, Klase & Lemond, LLC.
Bank customers who have been charged multiple overdraft fees who are interested
in learning more about this litigation are encouraged to visit
www.bank-overdraft.com where they can submit their complaint to plaintiffs' counsel. To speak
with an experienced Philadelphia class action lawyer at Golomb & Honik,
P.C., please call (215) 278-4449. Our firm handles a wide array of complex
litigation including class action and multi-plaintiff cases.