JP Morgan Chase Overdraft Settlement
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Recently, JP Morgan Chase settled a lawsuit from plaintiffs concerning overdraft fees. The bank agreed to pay $110 million to settle the claims. This comes on the heels of increased banking regulation and other lawsuits filed against the bank.
Plaintiffs accused JP Morgan Chase of engaging in shady practices in regards to calculating overdraft fees. According to some news reports, the bank made about $500 million annually from this deceptive practice. According to the plaintiffs, the bank would rearrange certain transactions to cause overdraft fees against their customers. Known as high-to-low resequencing, they would process larger transactions first rather than processing them in the order they occurred.
Customers saw through this practice and filed lawsuits. The banks will take a hit because it removes another profit generating tool from their tool box. The customers have won a victory for the consumer because this settlement will possibly cause other U.S. banks that are engaging in this practice to settle their lawsuits as well.
About the Author:
Lulaine Compere writes for RD Legal Funding, a law firm financing company based out of Cresskill, New Jersey.