TD Bank Faces Yet Another Overdraft Fee Class Action Lawsuit

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Another class action lawsuit has been filed against TD Bank alleging that the bank inappropriately charged overdraft fees on accounts that were not overdrawn.

Lead plaintiffs Frederick Klein, Ronald Ryan, Geoffrey Grant, and Tashina Drakeford allege in their class action lawsuit that TD Bank has been imposing overdraft fees on accounts improperly since August of 2010.

“Instead of using the actual balance (money in the account) for determining if the account is overdrawn as it is obligated to do under its contracts with its customers, TD Bank utilizes an artificial and anticipation balance (referred to as the ‘available balance’) to determine whether it is going to assess an overdraft fee,” allege the plaintiffs in their class action lawsuit. “Available balance” say the plaintiffs, “is the actual balance minus potential future transactions that may – or may not – come in for posting at some later date (pending authorizations).”

“This practice of assessing overdraft fees on transactions when there is money in the account to cover the transaction is a breach of two of TD Bank’s contracts with customers,” argue the plaintiffs in the TD Bank class action lawsuit. “First,” they begin, “it is a breach of the ‘Opt-in’ contract between TD Bank and the customer, which is the contract that provides TD Bank the authorization to assess an overdraft fee on non-recurring debit card or ATM transactions. The Opt-in agreement specifically states that ‘an overdraft occurs when you do not have enough money available in your account to cover a transaction.’”

Additionally, “it is a breach of the Personal Deposit Account Agreement (‘PDAA’),” the class action lawsuit alleges, “which states ‘Overdraft’ is an ‘advance of funds’ and results in fees that ‘may be assessed on items presented for payment that bring your Account into a negative balance.’”

“The PDAA also states that ‘overdraft fees’ are not charged on ‘pending’ authorizations. In light of the terms of the Opt-in agreement and PDAA, TD Bank is not permitted to charge overdraft fees when there is enough money in the account to cover the transactions, and thus, does not require an advance of funds from the bank,” allege the plaintiffs in the overdraft fee class action lawsuit.

The plaintiffs seek to be appointed representatives of a nationwide Class of TD Bank customers and to be awarded compensatory damages in an as yet unspecified amount. “This action does not challenge TD Bank’s practices or disclosures except as to when they are in conflict with the promises and conditions expressly stated by TD Bank in their contracts with customers,” say the plaintiffs.

Last month, TD Bank was hit with a similar overdraft fee class action lawsuit in New York federal court. This overdraft fee class action lawsuit accuses TD Bank of continuing its improper overdraft fee practices despite agreeing to pay $62 million to settle similar allegations in 2013.

TD Bank operates in Connecticut, Delaware, Florida, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington, D.C.

The plaintiffs are represented by Joseph G. Sauder and Matthew D. Schelkopf of Chimicles & Tikellis LLP, Richard D. McCune and Jae K. Kim of McCuneWright LLP, and Taras Kick and Thomas A. Segal of The Kick Law Firm APC.

The TD Bank Improper Overdraft Fee Collection Class Action is Klein v. TD Bank NA, Case No. 1:15-cv-00179, in the U.S. District Court for the District of New Jersey.