Target Red Debit Card Associated with Unfair Fees, Consumers Claim

Customers claim they’ve been wrongfully charged insufficient funds fees when using their Target Red debit card, despite having sufficient funds in their connected bank account.

Like many retailers, Target offers store card options so that consumers can save money or participate in special deals with their card. However, Target differs from other retailers because it not only offers credit card options but also offers a Target Red debit card.

The Target Red debit card is advertised as a non-credit card which is linked to an existing bank account. Target claims that customers can use their Target Red debit card like a regular debit card and save five percent on their purchases.

However, some customers say this portrayal may be leaving out a large portion of the Target Red debit card reality: excessive fees.

According to customer reports, the Target Red debit card can be approved for transactions when the connected account has insufficient fees. This can result in a Return Payment Fee from Target and a Non-Sufficient Funds fee from a consumer’s bank – totaling over $60 per transaction.

When a transaction is denied, Target reportedly attempts to send through the transaction up to two more times. Each additional attempt to clear the transaction results in more fees. If a consumer using their Target Red debit card is faced with nonsufficient fees, they can accrue over $100 from a single purchase attempt.

Fees associated with the Target Red debit card prompted a California man to file a class action over the issue in 2016. Plaintiff James Walters filed the lawsuit against Target, seeking to represent a Class of U.S. consumers who incurred fees while using their Target Red debit card.

Walters argued that the retailer deceives consumers into thinking that the Target Red debit card functions like a typical debit card, when it actually processes transactions through the Automated Clearing House network. This network processes Target Red debit card transactions similarly to electronic checks, meaning that they are not withdrawn immediately from the bank account and involve a delay. Due to the delay, consumers allegedly find their accounts overdrawn by the time the Target Red debit card transaction is processed.

Consumers like Walters claim that this practice is an intentional strategy by Target to cut down on processing fees. The retailer allegedly delays transactions to submit them in massive batches to the Automatic Clearing House network. Although this saves money for the company, it can add days to the processing time of a customer’s transaction. Over the course of these several days, a consumer’s account can deplete to the point that a Target Red debit card transaction would overdraw the account.

If you have a Target Red debit card and were charged a Return Payment Fee and an insufficient funds fee from your bank, you may qualify to participate in a Target Red debit card class action lawsuit investigation. A Target Red debit card class action could recover compensation for fees, financial damages, and more.

The Target Red Debit Card Class Action Lawsuit is Walters v. Target Corp., Case No. 16-cv-1678, in the United States 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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