Kim Gale  |  August 24, 2018

Category: Consumer News

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Target Red Card Debit Transactions Blamed for Excessive Bank FeesDid using a Target Red Card debit card cause you to incur excessive insufficient fund fees at your bank?  If so, you’re not alone.

The Target Red Card debit card is a store-branded debit card that offers cardholders five percent off purchases. The card is promoted as working like a bank debit card because the money used to pay for items comes from the cardholder’s checking account.

But some customers allege the Target Red Card debit card is not like a bank debit card at all. A bank debit card immediately deducts funds from your bank account, but a Target Red Card debit transaction initiates a process through the Automated Clearing House (ACH) network. An ACH transaction is an electronic payment system that process large volumes of credit and debit transactions in huge batches.

When a customer makes a purchase with a Target Red Card debit card, the transaction can take three or four days before it is posted in the customer’s bank account.

Target Red Card Debit Card Allegations

A California customer filed a Target Red Card debit card lawsuit because he was told by a Target representative that the Red Card would allow him to purchase items and the funds would immediately and directly withdraw from his checking account.

Plaintiff James Walters said he was instructed to use a PIN number with the card as he would a debit card. Walters alleged that instead of seeing the funds directly come out of his bank account as he expected, his Target Red Card debit purchases took several days to post to his account.

He said by using the ACH network, the Target Red Card debit card more accurately can be described as a feature that initiates an electronic check, and not one that takes money directly from a bank account.

Walters alleged that to save money with the ACH transactions, Target waited and processed them in batches, which caused the delay at customers’ banks. Walters alleges the delay increased the chance that a customer’s checking account could become overdrawn by the time the Target purchase posted.

If a transaction attempted with a Target Red Card debit card is refused, Target charges Returned Payment Fees, just as a bank does. The difference is that bank fees are regulated by federal law, but Target’s RPFs are unrestricted.

Walters alleged that one declined Target Red Card debit transaction can amount to RPF charges of more than $100. On top of Target’s fees, the customer’s bank may also charge Non-Sufficient Funds (NSF) fees for the declined transaction.

In some cases, Walters claimed, Target tries to submit the pending transaction to the consumer’s bank up to a total of three times, and each attempt can incur NSF fees charged by the bank.

Anyone who has paid multiple fees to their bank and to Target may find the five percent discount on purchases is not worth the cost of the fees. Walters argues most of the RPF and NSF fees could have been avoided if not for the several-day delay in processing of Target Red Card debit card transactions.

If you have incurred a Return Payment fee by the Target Red Card debit card and NSF fees by your bank due to delayed transaction processing, you could qualify for this investigation.

Join a Free Target Red Card Class Action Lawsuit Investigation

If you have a Target Debit Card and you were charged fees for insufficient funds by Target and your bank, you may qualify to join this Target Red Card class action lawsuit investigation.

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