Well, finally some good news that has been kept from the public at-large. The Major Banks, including TD Bank, JPMorgan, RBS Citizens Bank, Wells Fargo & Co. and Bank of America have recently offered massive settlements on Class-Action Lawsuits over Overdraft Fees and other criminal activity – need I say more…
The most recent settlement is by TD Bank, who has offered a settlement of $62 million.
Quoting from Yahoo! Finance:
The Toronto-Dominion Bank (TD) is the latest to join the ever-growing list of banks facing litigation over misconduct and malpractices concerning overdraft fees. The bank has agreed to pay $62 million in settlement of a lawsuit filed against it by its customers accusing it of unreasonable assessment and collection of overdraft fees. However, the settlement requires approval from the U.S. District Judge in Miami.
The customers accused TD Bank of regularly dealing with transactions pertaining to debit cards in the order of magnitude of the transaction rather than the chronological order.
The intentional malpractices resulted in faster negative balances in customers’ accounts, leading to a larger number of overdrawn transactions, each of which then became chargeable. Consequently, overdraft fees piled up in excess. Moreover, TD Bank violated the U.S. Federal Reserve’s regulation of obtaining customer approval before charging any overdraft fees.
Other banks have offered similar settlements. Of particular interest in the Yahoo! Finance article posted Tue, May 15, 2012 5:55 PM EDT are:
Citizens Bank, a unit of The Royal Bank of Scotland Groupplc (RBS) has agreed to disburse $137.5 million to settle the lawsuit filed against it by the customers, accusing it of fraudulent transaction entries to procure larger overdraft fees.
JPMorgan Chase & Co. (JPM) was asked to pay $110 million to clear up a similar lawsuit filed against it.
According to the Yahoo! Finance article, in 2011:
in 2010, Wells Fargo & Co. (WFC) was ordered to repay $203 million by the U.S. District Court of Northern California to recompense customers who had sued the company for charging unfair overdraft fees.
For more information on this story and the banks mentioned, Yahoo! Finance provides links to Zacks Investment Research reports on the individual banks
A great article covering the Criminal Banking Cartels activity is an article on Forbes, by Halah Touryalai, Forbes Staff, who goes into great detail on the practices of these banks. One particular part of the article is reproduced here — the article is highly recommended reading.
Grossman, Roth, one of the the law firms handling the suits says bank overdraft banks charged consumers nearly $40 billion in overdraft fees during 2009 alone. (In 2011, the figure is estimated at around $30 billion.) From the law firm:
Not content with the fees they were getting, some banks adopted a practice of re-sequencing their customers’ debit card, ATM and check card transactions from highest to lowest dollar amount (as opposed to the order in which the transactions actually occurred). This enabled these banks to increase their overdraft fee revenues, and thus their profits, at the expense of their customers.
JPMorgan Chase & Co. (NYSE: JPM) is an American multinational banking corporation of securities, investments and retail. It is the largest bank in the United States by assets. It is a major provider of financial services, with assets of $2 trillion and according to Forbes magazine is the world’s second largest public company based on a composite ranking. The hedge fund unit of JPMorgan Chase is one of the largest hedge funds in the United States. It was formed in 2000, when Chase Manhattan Corporation merged with J.P. Morgan & Co.
Source: Wikipedia http://en.wikipedia.org/wiki/JPMorgan_Chase