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Debit Card Overdraft Lawsuits

Debit Card overdraft lawsuits can be a powerful way to get money back. Banks like TD Bank, CF, and Carolina First are all too familiar with this practice. These banks are notorious for reordering debit card transactions to cause overdrafts. A Union Bank customer recently had $50 in their checking account when she made a $5 latte in the morning, a $10 lunch purchase, and a $100 grocery purchase later that evening. In each case, she would be charged an overdraft fee of $35 for each purchase.

TD Bank

A TD Bank debit card overdraft lawsuit is a new trend in consumer protection law. This class action suits the bank for violating the Fair Credit Reporting Act and Consumer Financial Protection Act. In February, Abercrombie overdrew her account by $100, trying to transfer the money to Capital One. Because the funds were insufficient, the transaction was declined. In addition to the $35 NSF fee, Abercrombie had to pay another $70 in fees for her transaction.

Carolina First

The United States District Court for the District of South Carolina has approved a settlement of a putative class-action lawsuit involving TD Bank, Carolina First Bank, and Mercantile Financial Group for the illegal assessment of overdraft fees. The lawsuit asserts that the banks systematically rearrange debit transactions to maximize their overdraft charges. The plaintiffs seek treble damages in the lawsuit.


Consumers seeking to bring class action lawsuits against banks have a unique opportunity to do so with the help of a national law firm. Trief & Olk is leading the multidistrict litigation against Citibank and Citizens Financial Group, alleging that they improperly reorganized debit card transactions to increase overdraft fees. The firm represents a group of victims and is on the executive committee of the plaintiffs’ attorney group. The plaintiffs’ lawyers are pursuing class actions against the banks as part of the settlement of a recent Bank of America case for $410 million.


TD Bank is under fire from consumers for charging overdraft fees on debit cards and manipulating their orders. Earlier this year, the bank agreed to pay $62 million to resolve multidistrict litigation over these practices. However, the bank has yet to provide any specific details regarding the settlement. The class action lawsuit alleges that TD Bank illegally collected overdraft fees on millions of customers, including some of its employees. TD Bank charged overdraft fees on debit card transactions even when customers had sufficient funds in their accounts.

CF’s practice of reordering transactions

Citigroup has agreed to pay out settlements to overdraft fee consumers who alleged that the bank reordered their transactions so that they would accrue more overdraft fees. This practice is widely used by financial institutions and may have similar reasons. In essence, it is the practice of processing a debit card transaction in a different order than it was made.

CF’s marketing plan to preserve overdraft revenue

Overdraft fees are a large chunk of banking revenue, and they have been declining since 2012. During the COVID-19 pandemic, these fees fell by nearly 40%. To compensate, many banks have made changes to their overdraft policies. In 2017, Ally Bank and Alliant Credit Union announced that they would eliminate overdraft fees by 2021. While these measures are welcome, CF should consider whether they can market their policy improvement as a positive PR opportunity for their customers.

CF’s defense of Reg E theory

In recent cases, plaintiffs have raised generalized theories of unfairness regarding the implementation of Reg E. Specifically, plaintiffs contend that banks targeted vulnerable customers to avoid paying overdraft fees. While the Federal Deposit Insurance Corporation advises banks against steering vulnerable customers toward opting-in, the plaintiffs’ arguments fail to address the specific requirements of Reg E. In a recent case, the Eleventh Circuit Court of Appeals found that banks must disclose how they calculate their overdraft fees.

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