An account holder in California has filed suit against Citibank alleging that Citibank’s unfair and unconscionable assessment and collection of overdraft fees is in violation of its contractual terms with the customers in which the contract affirmatively states: “That there is no Citibank fee charged for POS transactions.” The case is entitled Ronald S. Arendas v. Citibank Inc., Case No. 4:11-cv-06462 (N.D. Calif., December 19, 2011).
This case is not like the debit transaction reordering cases that I have referred to several times on this blog, i.e. those that have been transferred to an MDL proceeding in Florida. Instead, the Plaintiff alleges that Citibank imposed on customers overdraft fees in certain prescribed circumstances known only to Citibank, charging its customers an overdraft fee of as much as $34 per transaction — even when this transaction was for only a few dollars. He accuses Citibank of intentionally designing this automatic, fee-based overdraft scheme to maximize overdraft fee revenue. He adds that Citibank misled customers to believe that, if a debit card transaction was approved, no overdraft fees would be due, and that Citibank never obtained the agreement of its customers to the imposition of overdraft fees in the context of debit card transactions.
