GRG Lawyers Representing Plaintiffs in Five Class Actions Against Banks for Deceptive Overdraft Practices

Gray, Ritter & Graham principals Bob Ritter and Don Downing, with support of associates Jason Sapp and Kaitlin Bridges, are co-lead counsel for the plaintiffs in five class actions against banks in Missouri, Kansas and Oklahoma arising out of allegedly unfair and deceptive trade practices. The banks are charged with misleading and defrauding their customers by reordering debit card transactions for the purpose of creating improper overdraft penalties.

The basic scheme is that the banks do a “look back” at the end of the business day and then “reorder” the customer’s debit charges for that day by placing the highest dollar charges first in line and the balance in descending dollar amount order down to the lowest charge. This “high to low” reshuffling is designed to maximize overdraft fees by triggering multiple overdraft charges which would not have been incurred if the debit charges had been processed in chronological or low to high order. Most commonly, the customer is unaware that the banks are engaging in this practice. It has been alleged and shown that this scheme hits hardest on those who can least afford it.

This unfair practice has been widespread throughout the U.S. banking industry and has cost consumers hundreds of millions of dollars in overdraft fees that should never have been incurred. A Federal Judge in California, condemning the practice, handed down a judgment against Wells Fargo Bank, N.A. in 2010 for $203 million [Gutierrez v. Wells Fargo Bank, N.A., 730 F.Supp. 2d 1080 (N.D. Cal. 2010)]. More recently, Bank of America agreed to repay $410 million to its customers in a settlement of an action in the overdraft multidistrict litigation pending in Florida [In Re: Checking Account Overdraft Litig. 1:09 MD 02036 (S.D. Fla.)].

Gray, Ritter & Graham and co-counsel have reached a settlement in a class action against United Missouri Bank and the matter is awaiting final approval from the Jackson County, Missouri Circuit Court [Johnson v. UMB Bank, N.A., et al, No. 1016-CV34791]. The remaining four class actions are in various stages of discovery or pre-trial briefing.