$8M Target Debit Cards Class Action Settlement Reached

Target debit card holders have reached a $8.2 million class action settlement which would end claims that Target deceptively markets its store debit card.

According to the Target class action, the store processes Target debit card transactions in a different way than regular debit cards which caused many customers to be charged unexpected fees.

The proposed settlement deal includes $5 million in cash compensation for card holders, and debt reduction worth $3.2 million.

Attorneys’ fees of up to 30 percent of the settlement amount have been requested, in addition to reimbursement for legal costs.

Class Members include all individuals with a Target debit card in the U.S. who were hit with a returned payment fee sometime between June 29, 2012 and the present.

The Target settlement would end two separate class action lawsuits over Target’s allegedly deceptive debit card practices, and was reportedly reached after mediated sessions between Target and consumers who filed the class action lawsuits.

In California, James Walters filed his debit card class action lawsuit on June 29, 2016. He asserted that Target knowingly misled customers into believing that the store card worked like a normal debit card.

Allegedly, traditional debit card charges are approved or denied immediately based on available funds in an account, and do not charge customers fees or insufficient funds, if the charge does not go through.

Walters asserted that the Target debit card does not work this way, and Target’s card immediately hits the customer with an insufficient fund fee and does not notify the cardholder’s bank of the fee until days after the customer made the purchase for which they had insufficient funds.

Allegedly, this can cause customers to be unaware that they are incurring fees.

Walters asserted the Target intentionally misrepresents how its store card works in an attempt to make the card seem more appealing to customers, enticing them to sign up for the card and make purchases that they might not otherwise have made.

Walters goes on to argue that Target profits from the cards and the fees associated with it.

Allegedly, Target did not sufficiently describe the terms of the card in associated information presented to consumers, most notably did not include sufficient information about the risk of fees associated with the card.

A separate store card class action lawsuit was filed in Minnesota on Sept. 12, 2016, by Michelle Dixon and Charles Powell.

These customers claimed that they and many other people were financially injured by Target’s practices, and argued that Target wrongly profited from the deceptive practices.

For their role in the Target store card class action lawsuit, Walters will receive $10,000 while Michelle Dixon and Charles Powell will each receive $3,000.

The Target class action settlement also includes provisions requiring Target to stop charging customers certain fees and requiring the store to reduce fees for at least two years.

Per the proposed Target class action settlement agreement, the customers and the retail chain will work together to change the store credit card agreement information to make it clearer for users.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The customers are represented by Jeff Ostrow and Joshua R. Levine of Kopelowitz Ostrow Ferguson Weiselberg Gilbert, Jeffrey Kaliel and Sophia Goren Gold of Kaliel PLLC and Hassan A. Zavareei of Tycko & Zavareei LLP.

The Target Store Debit Cards Class Action Lawsuits are Walters v. Target Corp., Case No. 3:16-cv-01678, in the U.S. District Court for the Southern District of California and Dixon, et al. v. Target Corp., Case No. 0:18-cv-02660, in the U.S. District Court for the District of Minnesota.

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