First Merchants Bank Overdraft Class Action Lawsuit
By Kimberly Mirando
A First Merchants Bank customer has filed a class action lawsuit against the bank for manipulating the timing that customers’ transactions post to their checking accounts, causing them to overdraw their accounts more frequently and triggering millions of dollars in overdraft fees.
Plaintiff Brenda Lear alleges in the class action lawsuit that First Merchants Bank manipulated customers’ debit card transactions to post from highest to lowest – instead of the order they occurred – in order to deplete a customer’s available funds “as quickly as possible” and trigger overdraft fees.
As an example, the First Merchants Bank class action lawsuit says one customer had an account balance of $100 and made four debit transactions during a single day of $10, $10, $10 and $95.
If the bank had processed those transactions in the order they occurred, the $95 charge would have been made against a $70 balance, resulting in a single overdraft fee. Instead, the bank posted the $95 transaction first and each $10 transaction thereafter, causing the customer to be charged three total overdraft fees of $35 each.
Lear says this improper overdraft scheme is accomplished by using “sophisticated software.”
“This automatic, fee-based overdraft scheme was intentionally designed to maximize overdraft fee revenue for FMB,” the class action lawsuit states.
At least 30 other banks have been accused of same allegations, resulting in millions of dollars in class action lawsuit settlements for customers in a massive consolidated case known as In re: Checking Account Overdraft Litigation.
Lear is seeking over $5 million for a proposed class of thousands of First Merchants customers who paid improper overdraft fees.
The First Merchants Bank Overdraft Class Action Lawsuit case is Brenda Lear v. First Merchants Corp., Case No. 13-cv-844, U.S. District Court, Indiana Southern District, Indianapolis.
Updated May 30th, 2013
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3 thoughts onFirst Merchants Bank Overdraft Class Action Lawsuit
First merchants is doing the same thing to me, taking my debits and overdrafting me before my credits, and trying to charge me because I had some checks stolen and I wanted to cancel those, since when do you have to pay bank to protect your account. So how do I join this lawsuit.
when can we file.
Bank of America has the same problem before but we did not go into classaction yet against them.