Customers Fight Fees Charged When Target Debit Card Declined

Lawyers investigate consumer claims that fees charged when their Target debit card declined were improper.

If you have a Target debit card declined and you were charged fees for insufficient funds by Target and your bank when making Target debit card purchases, even though you had enough money in your bank account at the time of the transaction, you may have a legal claim.

Target offers a Target REDcard to its customers, which offers the benefits of five percent off of purchases made with the card. The card is marketed as a traditional debit card, but consumers are claiming that its use comes with hidden fees, and that the card is less like a traditional debit card than advertised.

In the case of traditional debit cards, a card is linked to an account, and if there are insufficient funds in the account at the time a purchase is made, the purchase does not go through. If the purchaser has overdraft protection, it may kick in and cover the transaction for a fee.

However, consumers allege that in many cases, Target and a bank allow a transaction to go through even in cases in which a consumer does not have enough funds in their account to cover the transaction.

Allegedly, consumers are not notified when this occurs, and are then charged high fees for each time they make purchases greater than the funds in their account. This can cause consumers to go for days or weeks without realizing they have over-drafted their account, by which time they may have racked up many high fees. This fee is called a Returned Payment Fee. Consumers say that Target does not sufficiently warn people that they are at risk of incurring this fee.

Some consumers claim that Target intentionally misleads confirms about the nature of the card so that they can collect as many fees as possible. Other consumers claim that Target processes transactions several days after the transaction is made, at which point there can be insufficient funds in the account to cover the purchases.

Many consumers say that this processing delay is intentional, and intended to maximize the number of fees that Target can charge.

Target Debit Card Declined Fees Lawsuit

A consumer has already filed a lawsuit against Target over the issue of charging consumer fees and allowing transactions to go through, instead of having the Target debit card declined like a normal debit card.

In 2016, a California man accused Target of tricking consumers into getting the Target REDcard by not telling them that it is a payment method that comes with high risks, but setting up the payment system to mimic debit card processes, so consumers think it works like a debit card.

Plaintiff James Walters argued that unlike debit cards, payments made via the Target REDcard are processed in the Automated Clearing House network. He said that Automated Clearing House transactions function more like electronic checks than debit card transactions, because they are processed in massive batches, and can take several days to process.

Walters says that Target does not make this distinction clear to consumers, and intentionally misleads them about the nature of the payment and withdrawal system to lead consumerism to spend in ways that they otherwise would not, had they known about the risks involved, and had they known that their purchases would still go through instead of having their Target debit card declined.

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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