By Willy Staley  Updated on Mon Sep 22, 2014

Chase to Settle Overdraft Fee Lawsuit for $110 Million

Chase to Settle Overdraft Fee Lawsuit for $110 Million

Eric Norris/flickr source

(UPDATE: For those looking for information on collecting your settlement payment, learn more here. The settlement was granted preliminary approval on Friday.

JPMorgan Chase wants to pay just $110 million to settle a class-action lawsuit related to allegedly unfair overdraft practices that earned the bank $500 million a year.  American Banker reports the bank has filed a tentative agreement in the overdraft lawsuit with the U.S. District Court for the Southern District of Florida. 

In late 2009 a Miami-based law firm, Alters, Boldt, Brown, Rash & Culmo, filed a lawsuit on behalf of a large plaintiff class against thirty-eight different banks alleging abusive practices in how banks calculate overdraft fees. Central to the complaint is the argument that banks process transactions in a sequence designed to maximize overdraft fees, rather than to reflect the actual chronology of debits and deposits.

American Banker reports that Chase earned $500 million a year by ordering debit charges from highest to lowest dollar amount. Because of this practice, some customers who had accidentally overdrawn their account would be charged repeatedly for overdraft instead of just once. (Chase, like many banks, discontinued the practice in March 2011 due to consumer backlash.)

For example: someone who has $550 in their checking account does $50 worth of grocery shopping then spends $13 at a bar, $25 at a restaurant, and $5 at the pharmacy before cutting a $500 check for their rent will be charged three overdraft fees once the bank re-orders the charges high-to-low. Instead of just bouncing her rent check, our imaginary bank customer will clear her rent check — and this is the heart of banks’ argument in defense of the practice — but get charged $30 (the national average overdraft charge) three times for the smaller charges.

As we reported late last year, the Pew Charitable Trusts has been outspoken about their distaste for the practice, which banks claim they offer as a service to their customers, for whom larger purchases are likely more important than smaller ones. Consumers advocates and consumers tend to disagree.

Chase Overdraft Lawsuit

Chase’s settlement is pending Judge Lawrence Kings’ approval, reports American Banker. Last November, Judge King approved Bank of America’s $410 million settlement in the same class-action suit. Chase’s settlement offer is substantially smaller, although American Banker notes that “one factor that likely worked in Chase’s favor was a mandatory arbitration clause in its consumer contracts.”

As per Regulation E of the Dodd Frank Act of 2010, banks must now allow customers to opt-in to overdraft protection, instead of automatically enrolling them in the program. As a result, banks have raised their overdraft fees to compensate for lost revenue.

There are 10 more banks  under investigation for unfair overdraft fees by the law firm responsible for the suit, including HSBC and Regions Bank.

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  • John Galt

    How do we get a settlement check from this case? Even though this was announced in February, I haven’t seen any information on this.

    • http://www.facebook.com/joyce.johnson.9216 Joyce Johnson

      how do I be included in the law suit I recieved a card in the mail

  • Sharika H.

    I just received a notice about this on 08/08/12 and I’ve paid a bundle of overdraft fees. How do I become involved with the settlement.

  • disqus_7BovLOeW4u

    I dont use my debit crad anymore becouse of all the fees . They cant fee straight cash!

    • banksRpirates

      Agreed. But they (the banks) make it really hard to use pure cash because of it.

  • http://www.facebook.com/wendy.tweeq Wendy Tweeq

    I just received notice of this today that I’m a member of the Chase class, whom I changed over to after having the same thing done by BOA for years. I didn’t even know about the BOA settlement and it’s a shame. I expect to get pennies on the dollar from what Chase stole from and I don’t think I’ll settling. I’ll wind up suing them both on my own rather than going with the class action settle because the lawyers are getting all the money.

    • gevonna

      just wait and see i got a letter to and i want all my money from them

  • Jo

    In order to be eligible you would have had to received notification from the court involved on this case.

  • http://www.facebook.com/dony.jules Dony Jules

    i paid a lot of money in overdraft fees .how do i get part of the settlement.i received a notice in the mail do i just wait

  • Willard E Golden

    yes i received a letter in the mail too. so i guess we just wait till they tell us something! it is about time someone takes action against chase! they have been taking $35 out for three or four overdrafts a day for years! thank you once again!!!!

  • paul

    why does chase get off with 20% pay back. When I owe I have to pay back 100%. they shouldn’t get out of debts owed in overdraft fees for free

  • Annie W

    Annie W. My account had to be closed in 2009 or 2010 because of the overdraft fees, over $300.00 I had to reopen another account with Chase and pay the old account off,And Chase took money out of my new account to pay off the old account and put my new account in overdraft and I didn’t have enough money in there for my Bill’s to be paid. (So how do I get on the list for the overdraft settlement,) Because they did that transaction without letting me know and that was unfair to me because I agreed to put the money in the old account myself and Chase didn’t keep their word that we agreed to,

  • Luann Morrison

    I also received notice about the law suit……I have paid ALOT in overdraft fees!!! Hopefully we do get our hard earning money back!! Fingers crossed

  • an american victim

    When doing the math, $500 million stolen per year and only $110 million total minus lawyer fees, it’s clear crime does pay– if you’re a corporation! I was cheated out of hundreds of hard earned dollars and will probably be lucky to get pocket change.

  • FedUpwithChase

    I stopped using Chase Bank because of this. They always charged me for so many overdraft fees when in reality they shouldn’t have! I always complained about it, sometimes they gave me back my money but most of the time they gave me a hard time about it. I was paying them so much on overdraft fees that my account was always on negative amounts.

  • http://www.facebook.com/carmela.pisano.1088 Carmela Pisano

    do we need 2 do anything, or just wait 4 court decision n hopefully get a check?

  • http://www.facebook.com/rod.mead.9 Rod A Mead

    yes $331.00 overdraft fees because i used my debit card to buy gas for my car

  • carl scott weare

    I also received the notice in the mail,my husband & I had to close our account because of all the over draft fees .chase bank is still after us for the money,which is more than it started out to be. chase bank would’nt withdrawl money when you made the purchase they would put through an 100.00 check, bounce the small things.

  • gevonna

    i receive a postcard in the mail and i want all my money

  • Drea

    The lawyer’s fees do not come from the $110M. Counsel will submit a fee application once the settlement is approved. I believe in this action the fee is 25%. The lawyers do not take 25% of the $110M that is made available to class members, Chase pays it separately. Believe it or not, it is actually a complicated process and the federal judges are pretty strict about it.

  • shank k

    I also receive this notice and I cant find out where to fill out the paperwork or do whatever is necessary to be included. I work hard like so many Americans so why does everyone have the right to our money when the big people are greedy for more. Like they need more.

  • JLucero

    me and my husband paid a lot of money in not only to chase but also to TCF bank in overdraft fees we changed from TCF to Chase because of there over draft policies.

  • Pekoe Dennis

    I hope it is nice piece of change $110mil were probably looking at a good $1000 idk

  • Dutch

    I received a card in the mail regarding this issue I was hospitalized for service connected injuries and some how the card ( delivered by a friend ) was lost. I know there is a phone number that is also available. How can I get some way to contact the? What about the damages done to our credit ratings?

  • angry_citizen810

    My account was drained by a spiteful ex-girlfriend. I have over $1400 in fees last I checked. I contacted chase and since I couldnt get her to admit to it, they wouldn’t help. Nowmy credit score went down and i’m stuck with this outrageous bill. They charged me $36 for $.77 over at a gas station. I couldve given them the change out of my car for that. Just because it was somewhat legal doesn’t make it right

  • Rkelty961

    chase is the right name for their bank,cause all they do is give you the runaround!

  • ladyb

    I got a letter too in the mail saying I was a settlement class member… I had to re open another account too due to them charging all that money!

  • Olivia Paddock

    They are still doing this!   We ran short this month, over drafted, and CHASE changed the sequence of charges to maximize the number of overdrafts.  I took pictures of the before and after.  It happened twice this month.  Instead of 2 overdrafts we incurred 6!  I have no idea how to go about disputing this.  I am not hopeful that customer service will be much help but it’s worth a try.

  • Jaheimnuber

    we are the victim not lawyer for them to get $123 million

  • regina

    I GOT A CARD ALSO AND HAVE PAID ALOTS OF OVERDRAFT FEES . DO WE STILL HAVE TO FILL OUT ANYTHING IF WE RECEIVED A CARD. WILL WE GET THIS  MONEY ANY TIME SOON!!!!!!!!!!!

    • Patsy

      payment comes in as a postcard check.

  • valerie h

    got my settlement card in the mail and i want my money. they charged my hundreds in fee by so call paying my rent first. hell rent went in 4 days after i used my card. give me my money back because you know you r full and it time to pay.

    • valerie h

      thats full of it and it;s still time to pay up

  • pbagley

    I have received a card also I was with Chase for 3years how do I get more info

  • Debbie Francis

    I too received the notice of the suit, does anyone know when we may recoup our money?

  • gevonna williams

    i want my money

  • may

    Please go to chaseoverdraftsettlement.com and frequently asked questions 21, it’s hard to believe but the lawyers are asking for 30% + cost and expenses of prosecuting the class action case and it will come out of our settlement fund. I don’t believe we will get all of the money they owe us! I wish the lawyers would not settle for this amount since Chase was earning 500 million annually on their bogus overdraft practices! It’s just right, I could tell you what it’s done to me and my family but i’m sure there are thousands of simular stories! Good luck to all.

  • lowerygraham@hotmail.com

    Hello my name is Pamela Lowery-Graham. how do I be included in the law suit? I recieved a card in the mail.

  • http://www.facebook.com/gigi.rodriguez.18 Gigi Rodriguez

    I also received a letter and my address changed how can I give them my new address?

    • Simon

      If you’re eligible for a settlement payment, and your Chase account is still active, you do not have to do anything. The payment will automatically go to your account.

      If you no longer have the Chase account, unfortunately, you’ve missed the Feb. 8, 2013 deadline to file a claim form.

  • Tony Dupriez

    This is complete bullshit! I had overdraft fees of over $750 over three years. Today I received $2.03!

    • Kevin

      Hold on… 2.03 was what they supposedly owed you???

      • kgca

        yeah I am only getting 3.99, not a great deal

  • leon

    May 16th, no check.. No information as to why or when. What do I have to do to get some of MY money.

  • Anne

    i just recieve a fourteen dollar check. The fees for overdraft were 35 dollars.
    Imagine that.

    • David J

      just got $33.87, had no idea what it was for until i googled. Haven’t been with chase in years.

  • Ryan

    I just recieved 2 checks at my house. One for $5.81 for my cousin and one for $111.94 to me. If they sent me that much, wonder how much money I had overdrafted!! College years were rough.

  • Rene’

    I just received my settlement check for $3.02. Woohoo! I use my banks as little as possible, the crooks…

  • Bill Easter

    like everyone else, I paid my overdraft fees & it kept on going so I got tired of their crap

    & closed my account but before I did, I went in & talked to the “mgr” who really put the screws to me. He ended up getting my pay check, my wifes & what I had in savings for a total of over $1400. & today I get this bullshit check for 9.25. “BFD”. I

    guess in a way, I got back at them tho. Ha!

  • Patsy

    I had paid a lot in fees too.. and I got the settlement check but its only $16.00 and I have driven all over the place and no one and I do mean no one will cash it not even Chase!!! This makes no dog on sense! They should be paying me now for my gas trying to cash it!!

  • banksRpirates

    I had the same problem with Wells Fargo and US Bank. Are they being sued too?

  • Johnny Strickland

    yes I would like to file a law sued on bank of America for the same thing anyone know a good lawyer for this