Unfair Overdraft Fees TD Bank Canada
The attorneys at Morgan & Morgan are investigating a potential lawsuit on behalf of Canadian customers of TD Bank who were charged unfair overdraft fees. It has been alleged that the bank has been processing their customers’ fees in a highest-to-lowest sequence, rather than in the order in which the transactions were made. This transaction sorting causes the customer’s account to be depleted more quickly, thereby maximizing the number of overdraft fees the bank can charge.
If you are a Canadian resident who was charged unfair overdrafts by TD Bank or any other bank in Canada, you may be able to collect compensation for these overdraft charges. To find out if you are eligible, complete our free case review form today. There is no cost or obligation to have your claim reviewed.
Unfair Overdraft Fees Lead to Multi-Million Dollar Suits in U.S.
A number of major banks in the United States have been hit with multi-million dollar lawsuits claiming that they engaged in this same unfair practice of transaction sorting. Many of these suits have been consolidated in a federal court proceeding in Miami. More than a dozen banks have agreed to multi-million dollar settlements in regard to unfair overdraft fees including the following:
- Bank of America: $410 million
- Citizens Bank: $137 million
- Chase: $110 million
- PNC: $90 million
- TD Bank: $62 million
- US Bancorp: $55 million
While litigation has awarded compensation to aggrieved customers, it has also allowed these practices to be subject to a much higher scrutiny. The Consumer Financial Protection Bureau announced that it would be investigating the overdraft practices of several major banks. In addition to transaction re-ordering, the investigation will also focus on confusing customer communications; misleading marketing materials; and the unfair impact on low-income and younger consumers.
Example of Transaction Re-Ordering
To demonstrate how transaction re-ordering works, assume a customer has $100 in their checking account. Throughout the day, the consumer makes five $20 debits, followed by an $80 transaction at night. If the bank processed the transactions in the order in which they were made, the customer would only be charged one overdraft fees for the $80 debit; however, if the bank processed the $80 transaction first – even though it was made later – the consumer would be charged overdraft fees for four of their $20 transactions, even though they were made earlier. If the bank charges $35 per overdraft fee, this consumer would be charged $140 rather than $35.
Lawyers for Canadian Unfair Overdraft Charges
Essentially, when a bank re-orders a customer’s debits to maximize their overdraft fees, the consumer is charged more fees than they would have if the bank processed the transactions in the order in which they occurred. At Morgan & Morgan, it is our belief that TD Bank and other banks in Canada are engaging in these unfair overdraft practices. If you suspect you have been subjected to unfair transaction sorting, please contact us today for more information on your potential legal rights.