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Webster Bank Faces Overdraft Fees Class Action

A customer of Webster Bank has filed a class action lawsuit, claiming the bank manipulates customers' account debits in a way that maximizes overdraft fees.

In her suit, Kelly Mathena alleges that the bank routinely posts checks and ATM withdrawals against customers' accounts so they generate overdraft fees, even when accounts have a positive balance.

The suit alleges that Webster bank does this by re-ordering debit transactions from the highest dollar amounts to the lowest, to drain the accounts as quickly as possible and maximize fees.

Additionally, the complaint states that Webster Bank could stop debits from going through when the account balance drops below a certain threshold, or at least warn customers they lack sufficient funds to cover the debits.

Ms. Mathena's suit says the scheme is "extremely profitable'' for Webster and other US banks, citing federal banking data that lenders rack up more than $27 billion in overdraft fees annually.

Mathena, who says she has been a Webster accountholder since 2003, wants the bank to repay overdraft fees to her and other Webster customers from whom it collected. She also asks the court to award triple damages.

WEBSTER BANK OVERDRAFT FEES CLASS ACTION LEGAL HELP

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Last updated on Jul-26-10