Santander Bank convenience fees $800K class action settlement

Santander Bank agreed to pay $800,000 to resolve claims it charged unlawful convenience fees when consumers paid their car loans over the phone or online.

The settlement benefits individuals who had a car loan with Santander in Texas and paid a convenience fee when making a car payment over the phone, internet or through interactive voice response since Jan. 13, 2016. 

Santander Bank, formerly known as Sovereign Bank, is a Pennsylvania-based bank that has expanded into nine other states. The bank boasts 149 million customers across the world, $67.1 billion in U.S. deposits and $89.5 billion in U.S. assets.

According to a class action lawsuit, Santander violated the Texas Debt Collection Act (TDCA) by charging convenience fees to consumers making loan payments online or over the phone. These fees allegedly added up to $10.95 to payment amounts.

Plaintiffs in the class action lawsuit claim Santander’s “pay-to-pay” fees violate the TDCA, which prohibits collecting interest or additional fees on debts unless those fees are “expressly authorized” or “legally chargeable.” The fees charged by Santander are allegedly neither expressly authorized by account agreements or legally chargeable under Texas law.

The class action lawsuit also challenges Santander’s representation of these fees. Santander allegedly represents the pay-to-pay fees as a payment to a third party payment processing company. In reality, Santander pockets “nearly the entire amount” of the fees, the class action lawsuit contends.

Santander Bank hasn’t admitted any wrongdoing but agreed to pay $800,000 to resolve these allegations.

Under the terms of the settlement, class members can receive a cash payment. 

Payments will vary depending on the amount each class member paid in convenience fees. Class members who paid a higher amount in convenience fees will receive a larger share of the settlement fund. No payment estimates are available.

If the settlement is approved and no appeals are filed, payments are estimated to be sent around Dec. 26, 2022.

The settlement also provides credit repair benefits. Santander will request that credit bureaus delete related information from credit reports within 60 days of the settlement effective date.

If funds remain after the distribution of settlement payments, the money will be donated to Arkansas Jump$tart Coalition — a nonprofit organization which aims to improve financial literacy amongst young Arkansans. 

The deadline for exclusion and objection is Aug. 29, 2022. 

The final approval hearing is scheduled for Oct. 13, 2022.

No claim form is required to benefit from the settlement.

Who’s Eligible

The settlement benefits individuals who had a car loan with Santander in Texas and paid a convenience fee when making a car payment over the phone, internet or through interactive voice response since Jan. 13, 2016.

Potential Award

TBD

Proof of Purchase

No proof of purchase applicable

Exclusion and Objection Deadline

08/29/2022

Case Name

Wilson, et al. v. Santander Consumer USA Inc., Case No. 4:20-cv-00152-KGB, is pending in the U.S. District Court for the Eastern District of Arkansas

Final Hearing

10/13/2022

Settlement Website

TexasFeeSettlement.com

Claims Administrator

Frenzetta Wilson et al. v. Santander Consumer USA Inc.
c/o JND Legal Administration
P.O. Box 91451
Seattle, WA 98111
844-202-9491

Class Counsel

Randall K Pulliam
Lee Lowther
CARNEY BATES & PULLIAM PLLC

Defense Counsel

K Issac deVyver
Benjamin Sitter
MCGUIREWOODS LLP