A federal court in Chicago has begun notifying current and former bank account customers of Fifth Third Bank of a proposed $9.5 million class action settlement. A lawsuit filed in the U.S. District Court in Northern Illinois claims Fifth Third improperly assessed overdraft fees for insufficient funds on debit card purchases and ATM withdrawals by “re-sequencing” transactions to maximize the number of overdraft fees. The bank has denied the lawsuit’s claims.
The proposed settlement class includes anyone who held a Fifth Third account from Oct. 21, 2004 through July 1 of this year and incurred at least one overdraft fee associated with a Fifth Third debit card transaction. The Fairness Hearing on the proposed settlement is slated for March 16, 2011.
There are literally hundreds of cases like this against various banks that have been transferred to a Florida federal court as part of a Multi-District Litigation action alleging that the banks also engaged in this type of illegal action. The first cases filed were against the large national banks. Those cases are called the first tranche. Stoll Berne has cases on behalf of Oregon customers pending against Wells Fargo and US Bank in the Florida District Court. Cases against smaller banks were filed later and are now being handled in what is called a second tranche.
In September, 2010, Webster Bank, one of Connecticut’s largest banks agreed to settle a similar class action for $2.8 million. However, that settlement has come under attack by lawyers who have similar class actions pending in the Florida federal court against Webster Bank. Those lawyers claim the settlement is inadequate.
As reported previously on this blog, on August 10, 2010, a federal judge in California ordered Wells Fargo Bank to pay restitution of $203 million to California consumers who overdrew their checking accounts and were charged excessive overdraft fees because the bank re-ordered electronic debit transactions from the high dollar amount to the lowest dollar amount so as to deplete the customer’s available funds as quickly as possible while maximizing the amount of “overdraft fees” collected by the banks.