Refunds soon on the way to some credit card, debit card customers
At least 3 million customers of PNC Bank and Citizens Bank, including many in Western Pennsylvania, should receive a share of $227 million in settlement money starting in mid-2013.
The amount is related to allegations in federal lawsuits that the banks manipulated the sequence of debit card transactions in order to maximize overdraft fees.
The cases against PNC and Citizens are among several class-action lawsuits brought in the last couple of years against major banks — including Bank of America, Wells Fargo, JPMorgan Chase and Citibank — in federal court in Miami which made similar claims.
Settlement payments by those banks to customers likely will start early in the new year.
“There were about 30 banks involved at one point or another,” said Robert Gilbert, a partner at Grossman Roth, the Miami-based law firm that sued the banks.
PNC agreed in June to pay $90 million to settle the overdraft litigation. Assuming the settlement is finalized by a federal judge in Miami, said Gilbert, an estimated 1 million to 1.5 million PNC customers should receive payments sometime during the July-through-September quarter.
Bank spokeswoman Amy Vargo declined to commnent beyond noting that the settlement has not yet been finalized.
The amount of overdraft fees that bank customers pay depends on which transactions hit their accounts first.
For instance, a bank customer with $100 in a checking account, might use a debit card one day to buy a $10 breakfast, $20 lunch, $50 gift and $40 dinner. Presented in that order, those debits would trigger one overdraft fee with the dinner debit. But when manipulated and presented from highest to lowest debit amounts, the transactions would generate two overdraft fees.
RBS Citizens Financial Group, the parent of Citizens Bank and Charter One Bank in Ohio, in late April agreed to a $137.5 million settlement of similar claims that it altered the order of debit transactions in order to maximize fees.
Between 2 million and 2.5 million customers, including some locally, should receive settlement payments sometime in June, said attorney Gilbert, who anticipates the judge will finalize the agreement in early March.
Citizens spokesman Jim Hughes said only that the bank is “pleased to have this matter behind us.”
Customers of some banks subject to the class-action lawsuits that do not have branches in the Pittsburgh region might see some settlement money within weeks.
For instance, millions of customers of Bank of America, which reached a $410 million settlement of the case in May, have begun to receive payments settling allegations of overdraft-fee abuses.
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pennsylvania Game Commission reaps revenue from shale gas under game lands
- University of Pittsburgh researchers revisit war of electric currents
- Energy Spotlight: Minking Chyu
- As historic breakup nears, Alcoa works to redefine its ‘advantage’
- Older workers try to cut back on hours at job
- Paying pals digitally catches on
- Mylan plans stock buyback after bid to acquire Perrigo fails
- Nutritional supplement makers, led by GNC, want to create voluntary safety standards
- Batteries key to alternative energy’s success
- Make green home upgrades pay off