Refunds soon on the way to some credit card, debit card customers

| Thursday, Dec. 13, 2012, 12:01 a.m.

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

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