In Florida federal court, on Wednesday, a lawsuit was brought against Capital
One Bank after the bank was caught processing transactions in a manner
that would allow the bank to net the greatest amount in overdraft fees.
As of Wednesday, the court approved a settlement worth more than $31.7
million, which is to be paid by Capital One Bank. These funds will be
put into an escrow account no later than 14 days after the preliminary
approval. In addition, the bank will be required to pay the expenses and
fees for the administration of settlement as well as the notice program.
Members of the class that choose not to remove themselves will recover
shares from the settlement amount. The counsel representing the class
as well as other experts have retrieved data from Capital One, which determine
which account holders were actually hindered by these deceitful acts.
Additionally, Capital One has stated they will not oppose lawyer fees
for the class counsel, which can add up to 35% of the settlement fund,
not including the reimbursement of litigation expenses.
Attorneys from Golomb & Honik, P.C. will serve as part of the class counsel.
Capital One Attempted to Fight Back
On three different occasions, Capital One attempted to obtain case dismissals
on preemption grounds. However, a judge of the Florida federal court shut
down all of the attempts to apply the bank’s case to a decision
made by the Ninth Circuit, which handled comparable charges against Wells
Fargo which were preempted by the National Bank Act.
In those suits, the banks were caught deducting funds from accounts based
on transaction sizes rather than according to a chronological order. This
method maximized the amount of overdraft fees the banks could collect.
Many of the lawsuits began appearing in Florida until consumers gained
class certification to begin a class action lawsuit.
Still, many of the banks were able to fight off arbitration by highlighting
statements in customer agreements. However, the following banks were forced
to settle for millions of dollars: JP Morgan Chase Bank NA, Bank of America
NA, TD Bank NA.