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PNC Bank to pay $90M to resolve overdraft lawsuit

| Tuesday, June 26, 2012, 2:50 p.m.

PNC Bank agreed to pay $90 million to settle a federal lawsuit that claimed the Pittsburgh bank manipulated debit card transactions to generate excessive overdraft fees, lawyers said Tuesday.

The litigation, part of a class-action lawsuit against more than 30 banks, alleged PNC computer systems altered the sequence of customers' debit card and automated teller machine transactions. By listing them in highest-to-lowest dollar amounts, the bank created extra overdraft fees, the lawsuit claimed.

At least “several hundred thousand” PNC customers in Pennsylvania and other states were allegedly overcharged for debit and ATM overdrafts between 2004 and mid-2010, estimated plaintiffs attorney Robert Gilbert, a partner at Grossman Roth in Miami, where the lawsuit is pending.

A bank customer with $100 in his checking account, for instance, 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.

PNC spokesman Fred Solomon said the bank does not comment on litigation matters.

“This is an outstanding recovery,” Gilbert said. “We are extremely pleased to have achieved this result for PNC's customers who were adversely affected by this anti-consumer practice.”

The class-action lawsuit makes similar excessive-overdraft claims against such major banks as Citibank, Wells Fargo and US Bank.

PNC is one of several large bank defendants to settle the claims so far. Citizens Financial Group, the parent of Citizens Bank of Pennsylvania and Charter One Bank in Ohio, settled for $137.5 million at the end of April.

Bank of America reached a $410 million settlement of the case in May, and JPMorgan Chase reached a $110 million preliminary settlement in February.

Those settlements and the PNC settlement are expected to be presented to U.S. District Court Judge Lawrence King for approval in Miami later this summer.

Thomas Olson is a staff writerfor Trib Total Media. He can be reached at 412-320-7854 or at tolson@tribweb.com.

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