The lawsuit was filed in federal court on behalf of Jessica Duval, of Goffstown, New Hampshire, and other bank customers who were unfairly and illegally charged overdraft fees by Citizens Financial Group Inc. ("CFG"), for charges she made on her ATM/debit card. CFG is the parent company of Citizens Bank and Charter One Bank.
The class action lawsuit alleges that these charges violate federal and state law, as well as the contractual relationship the bank has with its customers. The lawsuit seeks certification of a class action on behalf of Citizens Bank and Charter One Bank customers who were improperly charged overdraft fees or who received insufficient disclosures about such overdraft fees.
The complaint alleges that Citizens Bank/Charter One manipulates debit transaction posting to cause overdraft fees even when there are sufficient funds to pay for a certain purchase. Citizens Bank uses several different methods to cause a customer to incur an overdraft fee even when her account has never been overdrafted.
The complaint also alleges that Citizens Bank directly violates the terms of its account agreement by allowing purchases and withdrawals even when a customer has an insufficient balance. For example, one contractual provision states that the bank will not allow withdrawals when there are insufficient funds. In fact, the class action alleges that the bank does allow withdrawals on insufficient funds even at its own ATMs -- and it does so without any prior warning to the customer. According to the complaint, the bank does this for the sole purpose of charging its own customers an overdraft charge.
The complaint also alleges that Citizens Bank has not allowed its customers to opt out of "overdraft protection," as recommended by Federal regulators.