A federal judge in Washington today preliminarily approved a $12 million settlement in a class action that alleges National City Bank improperly charged overdraft fees on debit card transactions and provided false information about account balances.
The plaintiffs, represented by Washington's Tycko & Zavareei, said in the suit that the bank, which PNC Financial Services Group purchased in 2008, reordered debit transactions in a manner that depleted available funds as quickly as possible to increase overdraft fees. Ballard Spahr represented the bank.
Settlement class members will receive $36 for each an eligible overdraft charge incurred on debit transactions between July 2004 and August 2010. Under the terms of the agreement, class members can be compensated for an unlimited number of overdraft charges incurred in any two calendar months during the class period.
One objector complained about limiting the recovery period to two months. Judge John Bates of the U.S. District Court for the District of Columbia said in his ruling today that restricting compensation to any two months prevents “chronic overdrafters … from being unjustly rewarded for their behavior.” The two months do not have to be consecutive.
The plaintiffs, Bates said in his decision, believe the $12 million settlement amounts to, at most, nearly 25 percent of the best possible recovery if the case went to trial. The plaintiffs’ attorneys and the lawyers for the bank both said the settlement is fair and reasonable, Bates said. The judge scheduled a fairness hearing for June 13.