Capital One to Pay $32M To Exit Overdraft Fee MDL

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 Legalwill 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.