As a banking customer, you expect your financial institution to give you fair rates, protect your banking assets and act in your best interest. You also expect these companies to follow state and federal laws regarding fraud.
However, there are instances when financial institutions have not adhered to these laws and participated in unfair, illegal or deceptive practices. When this occurs with more than one of the financial institution’s customers, they may pursue a class action lawsuit. These are some examples of these legal actions.
Bank fee class actions
Financial institutions earn a significant portion of their incomes on fees, but their fees cannot be too high, hidden or excessive. For example, they cannot charge their customers excessive overdraft fees, which should range from $27 to $39. Banks cannot charge multiple fees for a single transaction or ATM use.
In 2016, Wells Fargo illegally opened millions of bank accounts. The company employees attempted to meet unrealistic sales goals and inflate sales figures. These accounts damaged their customers’ credit scores and increased their banking fees. In addition, they inflated stock earnings and hurt investors, such as public employee retirement funds from Mississippi and Rhode Island. In May of 2023, Wells Fargo finally agreed to a $1 billion settlement.
Unfair ATM fees
Wells Fargo, JP Morgan and Bank of America, as well as banks in Visa and MasterCard networks, also faced a class action lawsuit for unfair out-of-network ATM fees. The Sherman Act, an antitrust law, governed this lawsuit as the class alleged that these high fees resulted in an unjust burden. In August 2022, the courts approved a $66 million settlement for anyone who did not receive fee reimbursement from October 2007 through November 2021.
Today’s customers should carefully watch the fees their financial institutions charge them.