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Citizens Bank Settles Overdraft Fee Class Action Lawsuit for $137.5M

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Coral Gables, FL (Press Release)Citizens Bank has agreed to pay $137.5 million to settle a class action lawsuit which accused the bank of manipulating its customers’ debit card and ATM transactions in order to generate excess overdraft fee revenues for the bank. The lawsuit, part of multidistrict litigation involving more than 30 different banks entitled In re Checking Account Overdraft Litigation, case number 09-cv-02036, is pending before U.S. District Judge James Lawrence King in Miami. Citizens Bank is part of Citizens Financial Group which, through RBS Citizens, N.A. and Citizens Bank of Pennsylvania, operates more than 1,500 retail banking branches throughout the Northeast, the Mid-Atlantic and the Mid-West.

The lawsuit claims that Citizens Bank employed software programs designed to extract the greatest possible number of overdraft fees from its customers. According to the lawsuit, Citizens Bank re-sequenced its customers’ debit card and ATM transactions by posting them in highest-to-lowest dollar amount, rather than in the actual order in which the transactions were initiated by the customers and authorized by the bank. According to the lawsuit, this internal bookkeeping practice resulted in Citizens’ customers being charged substantially more in overdraft fees than if their debit card and ATM transactions had been posted in the order in which they were authorized by the bank.

“This is an outstanding recovery for Citizens’ customers who were affected by this practice. We are extremely pleased to have achieved this result,” said Robert C. Gilbert with Grossman Roth in Miami. Gilbert serves as Plaintiffs’ Coordinating Counsel overseeing and managing all cases in this multidistrict litigation proceeding. He expects the settlement with Citizens Bank to be presented to the Court for approval later this year. Citizens Bank is not the first bank involved in this multidistrict litigation to settle similar claims. Last year, the Court approved a $410 million settlement with Bank of America. Settlements with a number of other banks have been announced over the past six months.

In addition to Gilbert, the principal lawyers involved in the Citizens Bank case are Aaron Podhurst and Peter Prieto of Podhurst Orseck in Miami, and Ted Trief of Trief & Olk in New York.

Grossman Roth, P.A. founded in Miami in 1988, also maintains offices in Ft. Lauderdale, Boca Raton, Sarasota and Key West. The firm concentrates its practice in the areas of class actions and complex commercial litigation, catastrophic personal injury, products liability, aviation, professional malpractice and other cases involving significant economic or physical damages.

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READER COMMENTS


Posted by

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While we were customers at Citizens Bank they told us that as long as we had direct deposit that we would not have any fees. Then we ended up getting fees and ended up getting a letter in the mail telling us that if we didn't have $5,000 in our account then we would continue to get fees. We ended up leaving the bank and they ended up throwing the rest of our money that was from our bank account into our faces. No words to try to rectify it or help us at all.

Posted by

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I'm looking for the settlement for the overcharges with the fraud from citizens Bank

Posted by

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I had to close all my accounts with Citizens Bank. Not A Good Bank To Deal With. I Sued Them Myself And Won On A Situation I Had a Few Years Back. I Only Have A Home Equity Loan With Them Remaining. The Fee's They Have Been Charging Me Have Been Astronomical (Late Fee's/Past Due Amounts). Were They Are Getting This I Have No Idea. They Have Ruined My Credit. Now There Is A Law Suit Against Them Again For Increasing There Rates On Home Equity Loans On People. Example Mine Should Be 1.79% And They Increased It To 2.99%. I Don't Understand How A Bank Can Get Away With All This. I Would Rather Have Under The Mattress Money And Just Pay Everything By Money Order. I Am Going To Pay Off My Home Equity Loan In A Couple Of Months And Just Be Done With This Bank. And Overdraft Fee's Again That Is Another Story.

Posted by

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I have been with Citizens Bank for 4 years .The customer service in this bank has exceeded my expectations. Manager helped me get organized in a way that has helped me grow my business. I recommend that any young entrepreneur or start up to get signed up with their business banking services as it can be difficult for an artist/creative person to get organized. I also have an account here and I am very satisfied with this bank.

Posted by

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Something else that I have noticed. I have an automatic payment set up for a bill. If my balance is close to this amount, it will not show up on the day it normally does. Example: I have an automatic payment for cable at $100 due on 20th of every month. Always shows up on the 20th (except if that falls on a non banking day, then next business day). If my account balance is $105, the payment doesn't show up in my online account on the 20th. Ive seen my online account like this for days after I know the payment has been taken out, still showing I have a balance of $105. That is questionable bank practices at best. I have been smacked by this before, mostly my own fault, took a chance. Sure enough, as soon as I made a transaction, low and behold the automatic payment shows up and I'm overdrawn.

Posted by

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I called fdic on the bank where I live and was called into the bank in about a week later and banker told me it was debit cards only and I had checking account and he wasn't going to press charges on me for this . I told i paid my fee or overdrafts and i really didnt think he could prosecute me I paid my checks and overdraft fees needless to say they seldom cash chechs that aren't on their bank for me know.

Posted by

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After that lawsuit payment they continue charging excessive overdraft fees,they cannot get away with this.

Posted by

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While a cUstomer at the charter one branch of citizens bank i too didnt understand the fees for overdrafts except tht i was told tht this was how the bank made money!

Posted by

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I had to close my account at Citizens Bank because of this practice. When I inquired about it, they told me that "this was the way the bank makes its money." PNC Bank did the same thing to me for years and I had to close that account also.

Posted by

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Citizens bank has done this several times to me over the past 5yrs. I will definitely look into this litigation settlement.

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I just got off the phone with a rep who told me that despite what I am seeing on my account...the banks policy is to recalculate transactions from largest to smallest despite which one comes in first. Ok that's if fair because? It's so unsettling going to bed knowing that your bank account is ok only to wake up and find that they have charged you with overdraft fees...I've been checking online for more information pertaining to this lawsuit and I havent found any updates....Has anyone heard anything else?

Posted by

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Citizens Bank is still reordering my transactions...Paid $74 in over draft fees because of it

Posted by

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I am aggresively charged monthly because of Citizen's Bank Software that sets up charges and then credits your
deposits. It is costing a couple hundred a month.

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