SAN DIEGO–A proposed class action lawsuit has been filed in U.S. federal court in Southern California against JPMorgan Chase Bank, alleging the bank has charged customers overdraft fees on debit transactions even though they didn’t actually overdraw their accounts.
The result has been millions of dollars in fees paid to the bank unnecessarily, according to the lawsuit.
The plaintiff, Jennifer Regala of San Diego, alleges JPMorgan Chase set aside funds to cover purchases at the time of the transaction and further adjusted the account balance accordingly in real time, but then assessed overdraft fees on the same transactions “when they purportedly settle, usually days later, into a negative account balance,” the lawsuit states.
The lawsuit further states JPMorgan Chase tells its customers it will determine overdraft fees when a purchase is initially authorized and a debit hold is issued, and the setting of already authorized transactions should not affect a customers’ account balance.
‘Something More is Going On’
“Something more is going on: at the moment a debit card transaction is getting ready to settle, Chase does something new and unexpected during the middle of the night, during its nightly batch posting process,” the complaint alleges. “Specifically, Chase releases is the hold it had placed on funds for the transaction for a split second, putting money back into the account, then we debit the same transaction a second time. This secret step allows it to charge overdraft fees on transactions that never should have gotten them—transactions that were authorized into sufficient funds and for which Chase specifically set aside money to pay them.”
The lawsuit calls the resulting overdraft fee of $32 “crippling” and claims it is a misrepresentation by the bank and account documents of its practices.
The proposed class action seeks to include all JPMorgan Chase checking account holders.