Bank Faces Class Action Over Its Overdraft Fee Practices | Orrick, Herrington & Sutcliffe LLP

Recently, a bank customer and his company filed a class action complaint in the Stamford-Norwalk Judicial District Superior Court against a Connecticut bank, alleging that the bank engaged in abusive business practices to maximize its costs. According to the complaint, the bank imposed $37 in overdraft fees for “Authorize Positive, Settle Negative Transactions” (APSN Transactions) and accounts that were not actually overdrawn, and charged multiple NSF or overdraft fees for a single item. The complaint alleges that the bank’s practices violated the bank’s consumer and business contracts with the plaintiffs, including the covenant of good faith and fair dealing, and violated the Connecticut Unfair Trade Practices Act.

The complaint describes specific instances in which the plaintiffs were charged fees that they allege were improper and alleges that the bank’s practices were deceptive, unfair, and designed to maximize fee revenue at the expense of customers. The complaint cites several federal agencies and their criticisms of the practices at issue in the complaint. The plaintiffs seek to represent three classes of affected customers: (i) the APSN class; (ii) the Overdraft/NSF Fee on Positive Balance class; and (iii) the Multiple NSF Fee class. The plaintiffs seek actual and punitive damages, restitution, pre-judgment interest, and attorneys’ fees.