Consumers Complain of Insufficient Funds Fees from Target Debit Red Card

A class action investigation has been launched against retail giant Target, after numerous consumers were allegedly hit with insufficient fund fees related to their Target debit Red Card. The Target debit Red Card is a store brand payment card that completes purchases by drawing funds directly from the consumer’s checking account.

The Target debit Red Card offers five percent off of purchases to consumers who choose to sign up — a very small discount compared to the insufficient fund fees consumers say they have been facing. The class action investigation is looking into complaints that the Target debit Red Card does not behave like a debit card, resulting in confused and frustrated customers hit with these insufficient fees.

These insufficient fund fees can also cause a purchase to fail or be returned due to the consumer’s account being overdrawn.

Overview of Insufficient Fund Fees Allegations

Consumers allege that the Target debit Red Card incurs massive fees when the checking account attached to the card becomes overdrawn. This differs from other debit cards that typically work by immediately taking funds away from the checking account, or by declining a transaction if it overdraws the account.

In contrast, the Target debit Red Card allegedly does not decline purchases that overdraw the account. Instead, consumers are hit with expensive insufficient fund fees. Furthermore, Target reportedly does not debit funds for several days after purchase increasing the likelihood of the account being overdrawn at the time the funds are taken out.

In addition, Target charges a Return Payment Fee in the case of purchase return. Further, the consumer’s bank often also charges their own insufficient fund fees, leading up to potentially more than $100 in fees for one transaction.

According to allegations made by consumers, Target also tries to submit the transaction to the consumer’s bank up to two or more times in the event of an overdrawn account. Each submission incurs an insufficient fund fee from the bank. A single purchase using the Target debit Red Card can incur hundreds of dollars in fees from the store and bank when Target resubmits the transaction multiple times, say consumers.

Target Debit Red Card Class Action Lawsuit

Target is already facing a class action lawsuit
over these allegations. Consumers claimed they had signed up for the Target debit Red Card after reviewing false marketing materials. According to the class action lawsuit, they did not understand how the card actually worked, including how they could face double or triple the amount of penalty fees for insufficient funds.

The Target debit Red Card class action lawsuit was filed by a man from California, who accused Target of duping customers into signing up for store brand card that carried unreasonable risks of large insufficient fund fees.

Plaintiff James Walters also alleged that the Target debit Red Card was falsely presented as a typical debit card, without mentioning the possibility of expensive fees.

While Walters acknowledged that the Target debit Red Card policy does warn against the possibility of overdraft fees, the store did not disclose how the insufficient fund fees can incur nor how high they can get.

Walters and other consumers sought multiple damages in this Target debit Red Card policy class action lawsuit, including counts of negligence and failure to warn.

The Target Debit Red Card Class Action Lawsuit is James Walters v. Target Corp., Case No. 16-cv-1678, in the U.S. District Court for the Southern District of California.

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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