U.S. Bancorp to Pay $55M to Settle Overdraft Fee Suits
U.S. Bancorp has agreed to pay $55 million to settle class-action lawsuits that accused the bank of manipulating customers’ debit card transactions so as to impose excess overdraft fees.
The settlement was announced Monday by Grossman Roth, P.A., a Florida-based law firm whose attorneys represented the plaintiffs in the class-action suits. The lawsuits against U.S. Bancorp were part of a bigger case involving 35 banks that was brought on behalf of their customers.
Lawsuits in the case claim that the banks’ computer systems re-sequenced the order of customers’ debit card and ATM transactions and processed them in order of largest to smallest, rather than in the order in which they were initiated and authorized. The suits claim that this alleged practice resulted in the banks’ customers being charged substantially more in overdraft fees than they would have had to pay if the transactions had been processed in chronological order.
“We are pleased to have achieved this result for U.S. Bank customers who were adversely affected by this anti-consumer practice,” Robert C. Gilbert, an attorney with Grossman Roth, said in a statement.
The settlement is pending approval in court.
Thirteen other banks named in the overdraft fee case have also reached settlements. They include Bank of America ($410 million), JPMorgan Chase Bank ($110 million), Citizens Bank ($137.5 million), TD Bank ($62 million), and PNC Bank ($90 million).
Meanwhile, Citigroup, Inc., Wells Fargo & Company, and Capital One Financial Corporation are among the largest banks involved in the case that have not settled, according to a Reuters report.
“We are pleased to put this matter behind us,” U.S. Bancorp told Twin Cities Business in an e-mailed statement. “We have made changes to the way we handle customers’ accounts in recent years, and we will continue to look for opportunities to enhance our consumer products.”
U.S. Bancorp is among the 10-largest public companies in Minnesota based on revenue, which totaled $19.1 billion in 2011. It is also the largest bank-holding company in the state based on assets.