UFB class action overview:
- Who: Axos Bank subsidiary UFB Direct faces a class action lawsuit over its money market accounts.
- Why: UFB creates new competitive-rate money market accounts while shifting previous accounts into lower-yielding legacy accounts without informing customers, the class action claims.
- Where: The UFB accounts lawsuit was filed in federal court in California.
Axos Bank subsidiary UFB Direct created new money market accounts with competitive rates while shifting current customers’ accounts into lower-yielding legacy accounts without notifying them, according to a new class action lawsuit.
Market rates rose dramatically in early 2022, but existing customers were not able to take advantage of current interest rates due to the shift, the UFB accounts lawsuit says. The new accounts had similar names, but existing customers did not benefit from the shift.
“Over the course of the class period, UFB executed this … tactic at least 10 times,” the lawsuit says. “UFB deliberately selected ordinary, nondescriptive adjectives for each account rebrand, aiming to minimize the likelihood of detection by even the most vigilant account holders.”
UFB described the money market accounts to customers as high-yield, exceptional or having a leading interest rate even though they did not reflect current interest rates, the class action says.
UFB dropped rates in legacy accounts as market surged, class action claims
The UFB class action describes the account shifts as a shell game that takes advantage of existing customers.
“As the federal funds target rate rose from 0.00% in March 2022 to a range of 5.25% to 5.50% in November 2023, the APY linked to UFB’s money market account products surged from 0.20% to 5.25%,” the class action lawsuit alleges. “However, UFB did not continue to raise the APY for the preceding ‘legacy’ accounts in response to market conditions, and indeed would lower the APY as market rates continued to rise.”
The plaintiffs and class counsel seek damages, restitution, a shift of all accounts to market rates and attorneys’ costs and fees.
A similar lawsuit filed in December 2023 claims UFB Direct lured consumers into opening a new savings account described as its highest-yielding savings account with a variable interest rate the company would then cap the interest rates on.
Do you have a UFB money market account? Let us know in the comments.
The plaintiff is represented by Philip M. Black and Chet B. Waldman of Wolf Popper LLP.
The UFB class action lawsuit is Pliszka v. Axos Bank d/b/a/ UFB Direct, Case No. 3:24-cv-00445-LL-DDL, in the U.S. District Court for the Southern District of California.
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2 thoughts onUFB class action claims bank’s high-yield accounts pay below current interest rates
We do have a savings account with UFB, and we’re not told about the draw until I happen to discover at myself. We thought we were getting 5.5% but it was dropped sometime earlier this year without notification. I called and complained and they said they were putting it in a “ new account” at 5.25%. I would like to join a class action suit if possible.
I have seen some overdraft fee taken out when I had money in my account,also charge for deposit check that were giving to me from someone else and I was charged and they returned the checks