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HSBC Overdraft Lawsuit Nets $30 Million Settlement

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New York, NYAn excessive overdraft fees lawsuit filed against HSBC Bank USA has reportedly resulted in a preliminary settlement worth about $30 million. The $30 million settlement has been given preliminary approval by the judge, although the settlement is not without controversy. Other lawsuits have been filed against HSBC alleging the bank reordered transactions to increase profits from overdraft transactions.

According to reports, New York Supreme Court Justice Eileen Bransten agreed to the $30 million settlement, which affects HSBC customers who received one or more overdraft fees after transactions in their account were reordered. Lawsuits filed against various financial institutions allege the defendants reordered transactions from highest dollar amount to lowest in an attempt to push customers into overdraft more quickly, thereby increasing the number of transactions that result in an overdraft fee.

In addition to the state lawsuit, HSBC also faces federal lawsuits filed by plaintiffs who allege they were harmed by excessive overdraft fees. Plaintiffs in the federal lawsuits have reportedly argued against the $30 million state settlement, claiming the plaintiffs in the state settlement manipulated the litigation process. They argue that the settlement does not consider any interest plaintiffs would be entitled to if they won their lawsuit.

In approving the settlement, however, Justice Bransten said that even with interest the $30 million proposed settlement would cover enough of the damages to make the settlement reasonable.

Initially, Justice Bransten said she would not rule on the settlement while the federal lawsuit was ongoing, but a ruling from US District Judge Arthur D. Spatt indicated the state settlement could move forward.

Various other banks have faced lawsuits alleging they reordered transactions to push customers into overdraft more quickly. Some banks reportedly charge up to $35 per overdraft transaction, which can be financially devastating for a customer who may already be in financial difficulty. Furthermore, not all customers realized their transactions were being reordered from chronological to highest to lowest, making it difficult for them to take action against their financial institution. If the bank doesn’t tell customers the transactions will be reordered, customers may be able to file a lawsuit against the bank. Some lawsuits have already been settled while others are still pending.

The HSBC lawsuit is In re: HSBC Bank USA NA Checking Account Overdraft Litigation, case number 650562/2011, in Supreme Court of the State of New York.

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READER COMMENTS

Posted by

on
January 2, 2018

Dear Consumer Affairs,

This bank was notorious for taking funds out of my personal account when monies were to be placed into the account from my place of business.

I recently received cards asking had I been a victim to this crime of theft for my Insufficient funds. I am currently wondering whatever took place with the cards that people shared with the Law Suit for Settlement of bad business with HSBC. The cards arrived to my home approximately in May or June of 2017. I believe that 9 months is more than sufficient time to inquire on the status of my complaint and concern.

As a professional courtesy to a past bank account with this institution. I would greatly like to be reimbursed and contacted with regards to the status of funds that were removed from my account.

I thank you in advance for this opportunity to write this complaint on your HSBC platform.

Posted by

on
i was a customer of hsbc how do I find out if I am included in this?

Posted by

on
My husband and I were checking account customers of HSBC, when can we expect resolution of this and release of funds for reimbursement??

Posted by

on
The final fairness hearing was held on April 6th - was it approved by the court? If not yet, when will we see a decision?

Posted by

on
I'm a victim of this. When will we see any monies?

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