Legal notice in today's Los Angeles Times
shows Union Bank has agreed to pay $35 million to settle a class action over the order in which it processes debit card transactions, maximizing overdraft fees to its customers. I have posted the legal notice here
The class action alleges that Union Bank processed debit cars transactions in order of highest to lowest dollar amount in order to maximize the number of overdraft fees assessed to customers. It more specifically alleges that rather than declining certain transactions when an account had insufficient funds to cover the purchase, Union Bank authorized the transactions and then processed them in highest to lowest dollar amount order, which served to increase the amount of overdraft fees collected.
The lawsuit covers the period from July 16, 2005, to Aug. 13, 2010. Members of the class do not need to do anything to sign up to get their share. Once the court approves the settlement, the class members will automatically receive payment or account credit. Still, if you don't still have an account with Union Bank, I would recommend getting in touch with the plaintiff attorneys to make sure they know of your whereabouts. They have set up a Website for the settlement here
. Or you can phone them at 866-403-0685.
I note, this is solely over debit card transactions. But similar practices for processing checking and savings transactions should be just as improper -- and too many banks and credit unions try to get away with this method or other methods that serve to bounce transactions and pile up fees. As an example, I have had some serious disputes with Alliant Credit Union, and going up the ranks with them, over this issue in how it processes its online scheduled deposits -- but to no avail, they refuse to change their process, instead bounce transactions that should have been covered.