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Fifth Third Bancorp Faces Excessive Overdraft Fees Lawsuit


Fifth Third Bank and other financial institutions have faced allegations that they used deceptive practices in charging customers excessive overdraft fees. In 2011, Fifth Third Bank settled a class action filed on behalf of customers claiming they were charged excessive overdraft fees due to "reordering" of transactions in order to create overdraft situations and maximize profit from overdraft fees. Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio and is one of the largest banks in the Midwest. As of March 2016, Fifth Third Bank had $303 billion in assets under care, of which it managed $26 billion for individuals, corporations and not-for-profit organizations.

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Firth Third Overdraft Fees Class Action Settlement

Fifth Third Bank Overdraft Fees In July 2011 Fifth Third Bank agreed to a settlement of $9.5 million in a class action lawsuit Shannon Schulte et al. v. Fifth Third Bank, Case No. 0:09-cv-6655,US District Court, Northern District of Illinois, Eastern Division filed in November 2009.

In the lawsuit, class members who were Fifth Third accountholders claimed that Fifth Third Bank improperly assessed overdraft fees for insufficient funds on debit card purchases and ATM withdrawals by "re-sequencing" the order of transactions to maximize the number of overdraft fees.

The lawsuit was transferred in March 2010 to a checking account overdraft multidistrict litigation (MDL), the federal court mechanism that allows multiple, similar cases to be handled by the same judge.

The lawsuit alleged that Fifth Third Bank did not process debit card and ATM transactions in strict, chronological order but instead, went in a high-to-low order.

For example, high-to-low order might go something like this: if a customer has $100 in an account, and makes three transactions, two for $25 and one for $120, in that order, re-sequencing would place the $120 transaction first, draining the account so that rather than charging one overdraft fee for the $120 transaction, the bank could charge three overdraft fees.

In the order approving the $9.5 million settlement reached between class members and Fifth Third Bank, Thomas Tarter, an expert on banking and financial institutions reviewed settlement-related documents, Fifth Third Bank's public filings and the bank's website, along with additional information provided by Fifth Third, including non-public and confidential documents.

Tarter estimated that during the class period, Fifth Third Bank collected approximately $97.7 million as a result of its re-sequencing policy.

As part of the settlement agreement, Fifth Third Bank agreed to modify its business practices to no longer re-sequence debits from highest to lowest amount and instead process all charges in the actual order they are presented.

Recent Statistics on Fifth Third Bank and Overdraft Fees

According to a Dec. 2016 consumer protection report published by US Public Interest Research Group (US PIRG), reported overdraft and non-sufficient fund (NSF) revenue per bank account is on the rise.

From the US PIRG report:
    The average bank collected $17.76 in overdraft/NSF fee revenue per consumer deposit account in the first three quarters of 2016, an increase of 2.6 percent over the same period in 2015. Many banks with the highest overdraft revenue "rely heavily" on overdraft revenue.

The 10 banks that collected the most overdraft revenue through the first three quarters of 2016, in order, were: Chase Bank, Wells Fargo, Bank of America, TD Bank, US Bank, PNC Bank, Suntrust Bank, Regions Bank, Branch Banking and Trust, and Woodforest National Bank.

These banks collected an average of $98 in overdraft revenue per non-retirement deposit account, more than five times the national average. Five of the ten banks would have seen a net income loss in the first three quarters of 2016 without overdraft revenue.

According to the US PIRG report, Fifth Third Bank received 113 complaints for "problems caused by my account being low" per 10,000 accounts between Jan. 2015 and Sept. 2016. Average overdraft fees per account were $41.65.

Fifth Third Bancorp Overdraft Fees Class Action Legal Help

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FIFTH BANCORP EXCESSIVE OVERDRAFT FEES LEGAL ARTICLES AND INTERVIEWS

Illinois Plaintiff Launches TCPA Robocall Lawsuit against Fifth Third Bank
Illinois Plaintiff Launches TCPA Robocall Lawsuit against Fifth Third Bank
June 13, 2017
Chicago, IL: The Telephone Consumer Protection Act (TCPA) and the Federal Debt Collection Practices Act (FDCPA) were enacted to protect consumers from needless harassment over the phone. Common purveyors of such harassment have historically been telemarketers, or debt collectors that often wind up harassing the wrong people over a debt no longer owed, due to incorrect information and the all-too-common practice of flipping debtor accounts between different collection agencies, with vital information lost in the process. However, an increasing number of TCPA complaints are being directed to the highly-competitive banking industry. To that end a TCPA lawsuit has been filed against Fifth Third Bank alleging Fifth Third Bank TCPA violations [READ MORE]

Study Finds That People With Lowest Incomes Pay Most in Bank Overdraft Fees
Study Finds That People With Lowest Incomes Pay Most in Bank Overdraft Fees
April 11, 2017
Philadelphia, PA: A recent study has found that the largest percentage of bank overdraft fees are collected from bank customers who earn the lowest incomes [READ MORE]



READER COMMENTS

Posted by
Mary E Bell
on
Friday, 11/24, my 5/3 online statement showed a deduction for a loan payment. I have an account that will not let me use my debit card if the money is not in the account. Monday NIGHT, 11/27, I made a debit card purchase.

Tuesday 11/28, I am told the loan payment which showed as being taken out of my account on 11/24, BOUNCED! AND I am charged $37.00.

Don't tell me they are doing things chronologically, they are working debits/credits in their favor. Time to move to a credit union.

Posted by
Rob Schramm
on
I have been hit with more than 500.00 in overdraft fees in the last 2 months. Fifth Third returned 74.00. They are unwilling to work with me to fix the issue. I am going to be forced to close my account. I am a 32 year customer.

Posted by
Roseanna B Bouwer
on
5/3 employees, including a branch manager who was supposed to reverse fees and didn't, which would have stopped excessive overdraft fees, misinformed me and did not do as they said they would and have caused me to accumulate $199.66 in overdraft fees in less than a weeks time. I am disabled and receive a set amount of money the last Wednesday of each month. Now I'm being threatened via letter from the senior vice president with right to offset, debit bureau reporting and third party debt collecting. Everyone knowing the issues at hand and letting things build despite more deposits, to which 5/3 irregulary posted my deposits and my debits to my account. Refusing to reverse the $199.66 in fees stating they have gone over the limit of being able to reverse any more overdraft fees. I know they do not have a limit. I will be filing a lawsuit as this is my disability money. I only receive $803 a month and now I will be out $199.66 because of their refusal to reverse fees. How am I supposed to live off $600! That doesn't even pay rent!

Posted by
Patrick L Hatley
on
Ive made several deposits with Fifth Third bank this week ( 5/8-5/9) just to cover a few things from the weekend. I have also transferred Monies from my paypal account on 5/3/2017 along with making a 55. dollar cash/147.00 paypal deposit on 5/8 and 5/9. Ive been hit with 5 overdraft fee's in less than 48 hours due to Fifth third bank NOT POSTING MY DEPOSITS (INCLUDING CASH). What came in was postage fee's from USPS in which my deposits would have covered if only Fifth Third wouldn't have held them up between 48-72 hours. Also, they (Fifth Third) are saying that PayPal are holding up the money which isnt true, Paypal releases your money 24hrs after its cleared, not 48-72hrs as they are claiming. Enough is Enough already, is there ANYONE i can discuss this with?? Fifth Third customer Service doesn't have a clue and frankly dont care because its by script.
PH

Posted by
Zach Lepla
on
For the past 3 years I have been victimized by Fifth Third Bank through deceptive overdraft practices and manipulation of my transactions to induce overdraft. Since July of 2016 alone I have been charged upwards of $1,300 in overdraft fees.

Posted by
Gwendolyn Tyler
on
just charged to many times

Posted by
North Carolina
on
I was charged over $270 in over draft fees by Fifth Third for a $12.60 oversight. My family is already hurting because of the economic down turn and they repeatedly charged me for this oversight thus kicking me when I am already down.

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