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 that date.
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 and damages.”
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 of Golomb Legal. PC.