JPMorgan wins court approval for settlement on overdraft fees

A senior judge for the US District Court for the Southern District of Florida approved a settlement agreement on Thursday between JPMorgan Chase & Co. and more than one million litigants nationwide who sued over excessive overdraft fees. The settlement requires JPMC to pay $110 million to customers in order to resolve the litigation. Judge James Lawrence King, who approved the settlement, stated that the agreement was fair, reasonable and adequate. Similar overdraft fee settlement agreements involving Royal Bank of Scotland and Toronto Dominion Bank are still pending approval.

Overdraft fees have been the subject of copious litigation recently. In November King approved a settlement in a class action suit against BOA - Bank of America for excessive overdraft fees. The settlement called for BOA to pay $410 million to 13.2 million people who had BOA debit cards between 2001 and 2011. BOA was among more than two dozen US, Canadian and European lenders named as defendants in the class action lawsuit, which consolidated claims across the country in 2009. In their amended complaint, the plaintiffs claimed that BOA's practices were deceptive in that they did not reasonably notify customers that they had the option of opting out of the overdraft scheme and declining transactions. In November 2009, the UK Supreme Court ruled that the British government could not challenge the fairness of bank overdraft fees as a matter of law.

(Published by Jurist.org - May 25, 2012)