Target RedCard Debit Deceptively Marketed, Customers Claim

The retail giant Target has been accused of deceptively marketing their in-house payment method to consumers. The Target RedCard debit payment system has been the instigator of controversy among consumers and the subject of at least one class action lawsuit filed two years ago in the U.S. District Court for the Southern District of California.

The Target RedCard debit is purportedly presented by the retailer as if it operated like a bank debit card, with transactions posting immediately. The store chain allegedly encourages this idea by having a customer opening an account choose a specialized pin and by naming the card using the word “debit.”

It further entices consumers to use the Target RedCard debit by offering a merchandise discount of five percent with each use.

What consumers claim is not disclosed about the Target RedCard debit system is that is doesn’t deduct from the associated bank checking account right away, like other cards with the term “debit associated with them.

A consumer can have the money in his or her account at the time of purchase. But if the Target transaction doesn’t post until after a one-to-two day delay, other transactions might post causing the balance to become negative.

Consumers also say the Target RedCard debit system will not refuse a purchase at the register if there is not enough money in the account, as an ordinary debit card arrangement might. These differences between a bank debit and the Target RedCard debit system allegedly set the customer up for a large returned payment (RFP) fee from the retailer which must be resolved. Customers say this fee may be big enough to swallow up the five percent discount originally offered.

Finally, it is not unheard of for purchasers to then incur non-sufficient fund fees (NSF) from the bank that holds the checking account linked to the Target RedCard debit. This is a double-whammy of costs that many consumers have become very outspoken against in recent months.

One trip through a register can rack up close to $100 in combined fees if the transaction doesn’t post when the consumer thinks it will.

Plaintiff: Corporate Delays Benefit the Business, not the Consumer

According to a report on the current Target RedCard debit class action lawsuit, the original plaintiff claims that the Target Corp. processes transactions made with their in-house payment card over an automated clearinghouse (ACH) network. These transactions are allegedly processed in enormous batches to save the retailer money. The delay necessary to gather in batches is what can truly cost the individual in terms of RFP and NSF fees, according to the plaintiff.

Were you or a loved one encouraged to take out a Target RedCard debit and then found your transactions delayed?  Did you incur RFP fees from the retailer and/or NSF fees from your bank because of this delay? Do you feel the card was misrepresented in its promotions? You may have a legal claim.

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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