Update on Class Action Lawsuit Against Citizens Bank for Overdraft Fees

On 9/28/13, I received a check from the Citizens Bank Overdraft settlement for $6.33 (below).

Citizens Bank Overdraft  Fee Settlement Check

Citizens Bank Overdraft Fee Settlement Check

The letter said, “This check is issued pursuant to the terms of class action settlement in the cases styled as In Re: Checking Account Overdraft Litigation, Case No. 1:09-md-02036-JLK; Duval v. Citizens Financial Group, Inc., et al., S.D. Fla. Case No. 1:10-cv-21080-JLK; Daniels v. Citizens Financial Group, Inc., S.D. Fla. Case No. 1:10-cv-22014-JLK; and Blanksenship v. RBS Citizens, N.A., et al., S.D. Fla. Case No. 1:10-cv-22942-JLK.

You can get more information about the Settlement by visiting the settlement website at http://www.citizensoverdraftsettlement.com, call the toll free number, 1-888-273-0426, or by contacting the Citizens Overdraft Settlement Administrator at PO Box 3410, Portland, OR 97208-3410.”


Important: If you are looking for information about the Citizens Bank Overdraft Settlement, the official website is here: https://www.citizensoverdraftsettlement.com//

On 11/19/12, I received this notice in the mail:

Most Commons Questions about the citizens bank overdraft class action:

1) How much will Citizens bank customers be paid out of the overdraft class action lawsuit settlement?

2) When will citizens bank reimburse overdrafts?

3) How to join the class action suit against Citizens bank?

I wrote Citizens bank customer service on May 4, 2012 asking about the settlement, because I too was affected by Citizen bank overdraft fees.

They wrote back:

“Dear Preston Leonard,

Thank you for your recent inquiry.  Please be advised if the court approves the settlement, impacted customers will be formally notified. If you have any further questions you may email us or call us at our 24 hour Customer Service at 800 922-9999.”


Citizens Bank to pay $137.5m to settle overdraft suit

By Beth Healy and Todd Wallack, Globe Staff:

Quote from Globe Article:

“Citizens Bank customers hit with questionable overdraft fees could receive refunds under a settlement announced Wednesday in which the bank agreed to pay $137.5 million to settle charges it manipulated customers’ debit card and ATM transactions.  The bank was accused of processing the transactions in a way that made overdrafts more likely, boosting the income it collected from customers forced to pay overdraft fees.  Citizens did not admit wrongdoing in the case, which is being heard in federal court in Miami. The court must still approve the settlement….”

Read the rest of the story about the Citizens bank overdraft fee class action settlement here.

A class action lawsuit against Citizens was filed on January 26, 2010 by Washington, D.C.-based law firm Tycko & Zavareei LLP, with a New Hampshire resident as the named plaintiff. This and other overdraft fee cases against Citizens and other banks were transferred into a “Multi District Litigation” case in the Southern District of Florida, presided over by the Honorable James Lawrence King, entitled In Re: Checking Account Overdraft Litigation, case number: 09-md-2036-King. This basically means that all of the cases against all of the banks regarding the same violations were merged into one giant class action presided over by one judge in one federal court. There was a consolidated complaint against Citizens (see below). Bank of American recently bought its way out of this lawsuit by settling for $410,000,000.

Excerpt from the Consolidated Complaint against Citizens Bank:

CASE NO. 1:09-MD-02036-JLK
MDL NO. 2036

1. This is a civil action seeking monetary damages, restitution and declaratory relief from Defendants, RBS Citizens, N.A., Citizens Bank of Pennsylvania, and Charter One (collectively, “Citizens Bank,” the “Bank,” or “Defendants”), arising from their unfair and unconscionable assessment and collection of excessive overdraft fees.

2. In the era of electronic banking and the ubiquitous use of debit card transactions, the assessment of overdraft fees has become a major profit center for many United States banks, including Citizens Bank. For years, banks covered customers who occasionally bounced checks and even did so for a time for customers using debit cards, without charging their customers. Since the early 1990’s, however, banks have devised methods to provide overdraft “protection” for customers and charge them in each instance. A recent FDIC report estimated that overdraft fees represent 74 percent of the total service charges that are imposed on deposit accounts in the United States. A 2008 FDIC study reports that overdraft fees for debit cards can carry an effective annualized interest rate that exceeds 3,500 percent. Nevertheless, the Consumer Federation of America reports that five of the ten largest banks raised their overdraft fees in the last year.

3. In 2007, banks collected more than $17 billion in overdraft fees. That number nearly doubled in 2008, as more and more consumers struggled to maintain positive checking account balances. In 2009, banks brought in $37.1 billion in overdraft charges alone.

4. Almost by definition, these fees disproportionately affect the poor, who are most likely to maintain low balances. Moebs Services, a research company that has conducted studies for the government as well as banks, estimates that 90 percent of overdraft fees are paid by the poorest 10 percent of banks’ customer base. Moreover, these fees have the tendency to create a domino effect, because the imposition of a service charge on an account with a negative balance will make it less likely that the account holder’s balance will reach positive territory, resulting in more fees.

5. Before debit cards existed, banks occasionally extended the courtesy of honoring paper checks written on overdrawn or otherwise deficient accounts for customers who were typically in good standing. Banks extended this courtesy largely because the third party involved in a sales transaction allowed the customer to pay by check, expecting the funds to be available and the check to clear. For example, if a customer wrote a check to purchase groceries, the grocery store would only know whether the check cleared after the groceries had been purchased.

6. The same considerations are not present when customers use debit cards. Banks could simply decline to honor debit or point of sale transactions where accounts lack sufficient funds to execute the transactions. Retail and service transactions could still be executed if consumers presented an alternative form of payment. ATM transactions could still proceed if banks provided a warning that an overdraft fee would be assessed, and customers chose to proceed nevertheless. In fact, until a few years ago, most banks simply declined debit transactions that would overdraw an account.

7. Instead of simply declining debit transactions when there are insufficient funds, or warning its customers that an overdraft fee will be assessed if they proceed with the transaction, Citizens Bank routinely processes such transactions and then charges its customers an overdraft fee of $39 in most cases – even when the transaction is for only a few dollars. This automatic, fee-based overdraft scheme is intentionally designed to maximize overdraft fee revenue for Citizens Bank. Additionally, as part of its inequitable motive to generate profits gained through the imposition of unconscionable overdraft fees, Citizens Bank failed to give customers the option to “opt out” of overdraft protection.

8. In many instances, these overdraft fees cost Citizens Bank account holders hundreds of dollars in a matter of days, or even hours, when they may be overdrawn by only a few dollars. Even more egregious, customer accounts may not actually be overdrawn at the time the overdraft fees are charged, or at the time of the debit transactions.

9. Thus, it is through manipulation and alteration of customers’ transaction records that Citizens Bank maximizes overdraft penalties imposed on customers…


Filed under Boston News, Business Misconduct, Class Action Investigations, Class Action Lawsuits

19 responses to “Update on Class Action Lawsuit Against Citizens Bank for Overdraft Fees

  1. I too have had my ATM transactions manipulated so that the largest transactions hit my account first and when my 2 payroll checks are deposted they manipulate the smallest first. Thereby, I incur $39 fees for insufficent funds.I live paycheck to paycheck and every dollar is precious to me. Having to pay these overdraft fees is killing me. I thought the federal government regulates these banks? Am I wrong?

  2. Citizens bank fucking sucks!

  3. Sam Zell looks like he hhas a small package and a mean nasty face

  4. Robert Elstermeyer

    Hey everyone that’s been effected by this as well. I too, have been “assaulted,” by these outrageous and “illegal,” , fees. I am currently trading silly and pointless messages back and forth with Citizens. I fit into that bottom 10% that they target for a domino effect of fees. Just this week I checked my very small balance and noticed a debit of $157.77. Upon further investigation, I was notified by a branch employee that this was a “bank charge-off,” from an old closed account that was apparently overdrafted in 2009! Without notification, the bank decided to take this money now? Seriously, that’s legal? That’s just the latest thing, I have a long history of being “robbed,” by these criminals. If anyone can would like to get in contact with me to either share stories or most importantly, provide some advice on how to pursue this further. Thanks and good luck

    • A. M. O.

      I complained to the FDIC way back in 2011 about these predatory fees and the overdraft protection that didn’t apply to small businesses although I was never provided with the exact banking law that made that distinction and was specifically invited to enroll in the overdraft protection by Citizen bank through my business email in which they identified my small business account number as eligible to do so. The FDIC said Citizen did nothing wrong.. Citizen Bank continued to selectively allow purchases and then arbitrarily debit my account with deductions out of chronological order so that the account which would have otherwise had sufficient funds to cover at least one of those transactions would now be overdrawn entirely and enabled Citizen to assess a $37-$39 overdraft fee for each transaction. Then to further line their coffers, Instead of declining further transactions, Citizen allowed the transactions to go through, then delay accessing overdraft fees for each of the approved transactions to my account for at least 24 to 48 hours. At that time Citizen would stack the overdraft fees and debit my account in one lump sum amount that would range anywhere between $100 to $300 all at once on the same day and literally wipe out my account before I knew what was going on. When I called to complain they were horribly unsympathetic and refused to return the fees to my account. Some of the transaction were less that the overdraft fee accessed . I was constantly playing catch up to the point where I stopped making deposits because I never had a working knowledge of what my balance would be and feared more often that Citizen would just take the money to pay these outrages overdraft fees. At one time I could speak with the branch manager and complain about Citizen’s predatory accounting tactics and have the fees reversed and credited back to my account. Citizen stopped that and limited the amount the bank manager had authority to reverse to one over draft fee and only as a “courtesy”

      I was so happy to hear that a class action lawsuit had been filed against Citizens. I should be entitled to a reimbursement of over $1k+ of arbitrary and excessive bank fees Citizens took out of my account without notice or apology. Unbelievable!!!!!.

  5. Cara

    How do I join this? Im constantly getting hit with fees from this bank.

  6. Tina Brossoit

    I need help, Charter One is still doing what has caused them to have a lawsuit against them! Just today they cleared biggest to largest which caused me to over draft $222 not only that an ATM transaction that had cleared my account 2 days ago “somehow ” cleared my account today which obviously bounced. Any help in Michigan with this??

  7. I thought that I didn’t have to do anything to be part do this suit. I have yet to hear anything other than the post card.

    • yolanda

      Judy , I too received a postcard and nothing else . I finally got a response from one of the attorneys filing the claim against the bank. He stated that on March 12th 2013 the FL court gave its final approval and payments will be made shortly after the May 6th filing deadline. I hope this helps.

      • Shai

        Its after May 6th …A month later, has anyone heard anything else or when we shall receive payment?

  8. Dee

    I called Charter One back in 2005 about charging fees with the highest amount causing the overdraft then each small amount having an additional fee. They said “that’s the way it is and the practice has always been that way”. I contacted attorneys and they didn’t want to help. Bet you they wished they did now. DO NOT DO BUSINESS WITH BANKS-THEY ONLY CARE FOR THEIR OWN PROFIT INTEREST! I JOINED THE CREDIT UNION – BEST DECISION I MADE!! Too big to fail??? Let’s prove them wrong! Join a credit union!

  9. Tee

    I agree with Shai it is after the May 6th deadline so when will we start to recieve our payments it shouldnt not take this long it didnt take this long to take it from us so it shouldnt take that long to give it back to us times are hard enough

  10. denise

    i have been with citizens for years…i am sick and tired of getting charged overdraft fees like the one last week for $111 i too am waiting to hear something. does anyone know anything? like how do they determine who gets what $$$ do they put it in your account or send you a check?

  11. Im sick of citizens bank too. First off, trying to speak with a person on the phone is not an option on their phone menu…I think they should be required to pick up the phone when we dial zero….When you hit zero it say’s they didn’t understand my command or something like that.

    My problem with them is this. They ripped me off on those overdraft fees while I was in Europe. When I returned I went to the bank settled the account and closed it…Now 3 years later, I enter a bank to open a new checking account and they tell me that citizens has me with an outstanding account. I called Citizen’s after a half hour I got to speak to a person who said my account was settled and that the matter would stay on my credit for a period of 5 years. Why does it have to stay on my credit report for 5 years, they made the mistake, they are the ones who lost in court. UUUgh! I hate American Banks!

  12. Andonios

    I am so sick of the American Banking system. Citizens Bank is the worst. While I was in Europe I only used my debit card to with drawl from the atm directly, Citizen’s released the limit on my account and charged me over draft. When I got back to the states I went right to the bank and settled the matter. The were trying to steal over 3oo dollars in fees. That didn’t happen. I paid for what was actually overdrafted because they were already involved with law suits at the time.

    Today, 3 years later, I got to open a new checking account up at a CREDIT UNION and the union tells me I have an outstanding debt with Citizens. I called Citizens and they said my account was settled and that the activity would stay on my credit report for 5 years. How can they do that to me? They are the ones who released the limit on my checking account. Shouldn’t they be required to remove that from my credit report or the checking system?

    Someone please help me. I am one of the bottom 10% of the banking industries customers.

  13. Gbahtuo

    Gbahtuo: I too was affected by the action of Citizens Bank. Mine was so bad that I have to close one account and open another under the same bank. To date, I’m still a member of Citizens bank. I’m assuming that despite closing my previous accounts, my social security is still registered and attached to the close account, and what is due me, will be given. I’m also interested in the lesson the action teaches Citizens Bank.

  14. Steve

    Citizens Bank stole over 300 easily with their criminal practice of rearranging the bank card transactions to benefit them. I was refunded $20. I am beside myself with anger at a bank that I’ve been with for many years. No longer. As soon as I can I am leaving them behind. Crooks.

    • Annette M.

      Who here has breathed a sigh of relief after receiving the much anticipated settlement check (glaringly less than any single overdraft fee wrongfully charged by Citizens), and then slept peacefully with the knowledge that Citizens Bank has been held sufficiently accountable for their actions?????

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