According to Law 360 New York, TD Bank NA is facing a proposed class action
lawsuit in PA Federal Court. The suit alleged that the bank has consistently
maximized overdraft fees by manipulating the order of debit card transactions,
even when customers were not overdrawing from their accounts. These allegations
come less than one year after they paid a $62 million settlement for the
same practice in multidistrict litigation.
The plaintiffs contend that the bank has continued to illegally collect
overdraft fees using a sophisticated software scheme, assessing fees even
when customers have sufficient funds to cover their payments. Even after
the class action settlement, TD Bank has not corrected their actions and
continues to be in violation of federal law. The bank has collected hundreds
of millions of dollars in excessive overdraft fees by ordering debit card
transactions from largest to smallest, regardless of their chronological
order. This policy has been kept a secret from consumers.
The new lawsuit seeks to represent all customers who opened a new account
and were charged improper overdraft fees after the previous class period
ended on August 15, 2010. It will also represent those who had accounts
prior to that date and but were not charged overdraft fees until after
TD Bank NA is one of 30 banks accused of similar practices, including Bank
of America NA, JPMorgan Chase Bank NA, and PNC Bank NA. Each has settles
out of the multidistrict litigation for $410 million, $110 million, and
$90 million, respectively. RBS Citizens NA has also settled for #137.5
million in 2012.
The $62 million settlement was approximately a 42 percent recovery of the
most that class members could have recovered.
“The settlement achieved with TD Bank has recouped a substantial
percentage (approximately 42 [percent]) of the most probable damages that
settlement class members could have recovered if plaintiffs prevailed
at every juncture throughout the balance of the litigation on appeal,”
U.S. District Judge James Lawrence King said at the time. “While
the recovery achieved through the settlement does not achieve a 100 [percent]
recovery, the $62,000,000 settlement fund is an outstanding result when
considered in the context of TD Bank’s vigorous defenses to liability
The case was part of multidistrict litigation accusing more than 30 different
banks – including JPMorgan Chase Bank NA, Bank of America NA and
PNC Bank NA – of manipulating debit card transactions to increase
the number of overdraft fees imposed on account holders.
The case is Padilla et al. v. TD Bank NA, case number 2:14-cv-01276, in
the U.S. District Court for the Eastern District of Pennsylvania. The
plaintiffs are represented by
Richard M. Golomb,
Ruben Honik, and
Kenneth J. Grunfeld of
Golomb & Honik. PC.