Un-Merit-orious Behavior. Well, it just wouldn’t be Christmas without some mention of banks. After all, ’tis the season for the ringing of cash registers, credit and debit cards and overdrafts!’ This week Akron-based FirstMerit Bank is front and center, facing allegations in a recently filed class action that customers in Ohio were charged overdraft fees based “unfair and deceptive overdraft fee practices.”
The lawsuit, filed on behalf of plaintiff Donald Stevens of Crestline, Ohio, contends that such practices violate Ohio law and FirstMerit Bank’s contracts with its customers. According to the suit, FirstMerit engaged in a systematic policy of re-ordering debit card transactions from highest dollar amount to the lowest dollar amount, depleting the customer’s available funds as quickly as possible while maximizing the overdraft fees. Sound familiar?
The suit further states that the bank charged overdraft fees in situations where a customer did not overdraw a checking account and, in addition, failed to disclose or properly disclose its overdraft policies. This resulted in the bank providing misleading account balance information and often charging overdraft fees on top of overdraft fees.
Ho, Ho, Ho! It’s off to court they go!
Puts the Happy Meal Lawsuit in Perspective… Lorillard Tobacco Co, certainly made an impression this week, when a jury found the company guilty of attempting to entice African American children to become smokers, by giving out free cigarettes. Wouldn’t that also come under the heading of ‘drug dealing?’
The jury hearing the case has awarded $71 million in compensatory damages to the estate of a woman who died of tobacco-related lung cancer, and her son, Willie Evans. The facts, as presented by Mr. Evans, are frightening. In the suit, he claimed that his mother, Marie Evans, was introduced to smoking as a child in the 1950s when Lorillard gave her free Newport cigarettes at the Orchard Park housing project in Boston, where she lived at the time. Apparently, she was just nine years of age when she received her first free cigarettes. Initially, she passed them on to her older sisters or traded them for candy, but by the age of 13 she had begun to smoke. Mr. Evans claimed that as a result, his mother went on to smoke for the next 40 years, until her death from lung cancer at 54. And yes, Marie did try to quit, dozens of times, according to video testimony she made before her death.
Mrs. Evans’ estate was subsequently awarded $50 million in compensatory damages and the jury also awarded her son $21 million. A hearing on punitive damages is set to take place before the end of this year. Lorillard is expected to appeal the decision. No surprise there.
DanActive Don’t. Dannon Co Inc, agreed to a $21 million settlement this week, ending charges brought by federal regulators over claims that its DanActive drink and Activia Yogurt help boost a person’s immune system and relieve irregularity. The charges allege there is not enough evidence to support Dannon’s claims currently stated on the products’ packaging and in their marketing campaigns. Hey—if it sounds too good to be true…
Attorneys General from 39 states brought the case, which is the largest attorney general consumer protection multi-state settlement ever reached with a food producer, MSNBC.com reported.
The two lead states, Oregon and Tennessee, will receive $1.06 million under the agreement and the remainder of the money will be divided among the other states.
Attention Madoff-Watchers: The estate of Jeffrey M. Picower, a philanthropist and investor from Palm Beach, has reached a settlement with the Trustee charged with recovering assets from the Madoff bankruptcy, Irving H. Picard, and the United States attorney for the Southern District, Preet Bharara, that will see a total of $7.2 billion cash made available to compensate the victims of Bernard Madoff’s global ponzi scheme. The announcement comes on the heels of the suicide of 46-year old son Mark Madoff, who hung himself in his New York loft this week.
The terms of the settlement reportedly stipulate that $2.2 billion goes to a federal victims fund to resolve a lawsuit filed last year, and $5 billion will be placed in care with the Trustee.
Picower’s widow said in a statement released to the press on December 17, “I am announcing today that we have reached a settlement with the Trustee and the US Attorney for the Southern District of New York and that we will return every penny received from almost 35 years of investing with Bernard Madoff, an amount totalling $7.2 billion that will go to the Madoff victims’ compensation fund. “
The settlement constituted the largest single forfeiture in American judicial history, Mr. Bharara said.
Mrs. Picower said in her statement that she was confident that her husband had not been involved in the ponzi scheme, calling it ‘deplorable’, and that returning the gains was the right thing to do.
Okee dokee. That’s it for this week. See you at the bar…