HSBC’s ‘Secret’ Overdraft Fee Settlement Is Improper, MDL Attorneys Argue

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According to lawyers representing HSBC Bank USA NA customers in a consolidated class action lawsuit accusing the bank of imposing improper and excessive overdraft fees, HSBC reached a “secret” settlement in a class action settlement in New York state court, separate from the federal multidistrict litigation (MDL). The state court plaintiffs filed a motion seeking preliminary approval of the proposed class action settlement on March 2.

In a March 6 letter, the attorneys representing the plaintiffs in the federal HSBC overdraft fee MDL urged Judge Eileen Bransten of the Supreme Court of the State of New York not to approve the $30 million class action settlement because of the MDL currently pending in New York federal court.

In their letter, the attorneys argue that HSBC had been instructed to dismiss the New York class action lawsuit due to the pending overdraft fee MDL in federal court. They argue that they have “expended a tremendous amount of time and resources prosecuting these claims on behalf of the putative Class in accordance with scheduling orders issued by” U.S. District Court Judge Arthur D. Spatt.

Despite these agreements, the attorneys claim, “HSBC secretly entered into the proposed settlement with the Levin Plaintiffs and their attorney, … to prematurely and improperly terminate the Federal MDL.” They argue that the overdraft fee settlement was reached in state court shortly after a failed mediation session that sought significantly more money for the Class Members in the federal MDL.

The federal plaintiffs also filed a motion opposing HSBC’s request to stay the MDL, alleging HSBC “circumvented” a July 22, 2013 order by a New York federal judge that consolidated all of the pending overdraft fee class action lawsuits.

The HSBC overdraft fee class action lawsuits accused the bank of improperly maximizing the overdraft fees it collected by reordering customers’ transactions from highest to lowest. HSBC is just one of many banks to have been hit with class action lawsuits over their overdraft fee policies.

Further information about the proposed HSBC overdraft fee class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The attorneys representing the Class in the federal MDL are Brian S. Cohen and Clifford J. Bond of Cohen Law Group PC; Jonathan W. Cuneo and Jennifer E. Kelly of Cuneo Gilbert & Laduca LLP; Joseph W. Cotchett and Nancy L. Kineman of Cotchett Pitre & McCarthy LLP; and Seth D. Rigrodsky and Timothy J. MacFall of Rigrodsky & Long PA.

The state court plaintiffs are represented by Barry Himmelstein of Himmelstein Law Network and Adam Seth Turk of Turk & Davidoff PLLC.

The HSBC Overdraft Fee Class Action Lawsuits are In re: HSBC Bank USA NA, Debit Card Overdraft Fee Litigation, Case No. 2:13-md-02451, in the U.S. District Court for the Eastern District of New York; and In re: HSBC Bank USA NA Checking Account Overdraft Litigation, Case No. 650562/2011, in the New York Supreme Court.

UPDATE: The HSBC Overdraft Fee Class Action Lawsuit Settlement is open! Class Members have until June 6, 2016 to file Claim Forms.