There has been significant legal action in recent years regarding hidden bank fees and the harm they cause to consumers. In July 2023, the Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay more than $100 million to customers after officials discovered the bank was “double dipping” on overdraft fees. Consumers have also filed multiple class actions related to hidden fees.
But despite all the attention these cases have generated, many banks continue to charge hidden fees that are devastating for customers who may feel that they have no recourse. However, certain consumers may be able to join a class action lawsuit to recover compensation.
For over 30 years, the trusted attorneys with Woods Lonergan PLLC have protected the rights of consumers harmed by hidden bank fees and other unscrupulous business practices. Keep reading to learn more about how class action suits can combat hidden bank fees.
What Is a Class Action?
A class action lawsuit is an action allowing one or more plaintiffs to file a legal claim against a defendant or a group of defendants on behalf of a group or “class.” In these cases, every class member has suffered the same harm or legal wrongdoing by the defendant(s). Class action lawsuits allow these class members to resolve their legal claims through a single proceeding rather than multiple lawsuits. The courts can more easily manage class action lawsuits than lawsuits brought by multiple named plaintiffs. Indeed, most class action lawsuits involve dozens of class members, with many courts requiring a minimum of 40 class members. The plaintiff in a class action lawsuit is known as the class representative. Class action lawsuits often involve large corporations that have harmed numerous consumers.
Battling Financial Giants
Unfortunately for consumers, banks have a significant advantage in legal actions because they can afford teams of lawyers to defend against claims of unfair or unscrupulous behaviors.
Moreover, even if an individual plaintiff wins a lawsuit related to a bank’s hidden fees, the bank may continue to charge those fees, meaning they continue to profit from their ill-gotten gains.
Collective action is one way that consumers can battle these financial giants. By combining their legal claims into a class action, consumers harmed by banks can level the legal playing field and get a fair shot at finding justice.
Class actions offer another advantage when taking on banks: These lawsuits often bring to light the scope of the harm these hidden fees can cause, often resulting in media coverage that puts the bank’s unfair practices into a wider context and influences public opinion. Furthermore, when hundreds or thousands of people successfully show how they suffered the same harm by a corporation, consumers who suffered wrongdoing by other companies may be encouraged to take legal action to seek damages.
A recent class action in Iowa illustrates the power of collective legal action. The lawsuit alleges that Bankers Trust charged “crippling” overdraft fees when customers did not have enough money in their accounts to cover a transaction, even though the bank held the full dollar amount of the transaction in reserve before completing it. Moreover, while some banks and credit unions engage in this same practice, they typically require customers to expressly agree to it. The lawsuit alleges Bankers Trust did not require its customers to agree to such fees when they opened their accounts. The CFPB has called these fees “unfair” and “deceptive,” further demonstrating the need for collective legal action.
Is Your Bank Charging You Hidden Fees? Talk to Our New York Consumer Rights Attorneys Today
Wood Lonergan PLLC has extensive experience with class action lawsuits, including against corporations with dishonest business practices. For over 30 years, we have protected consumers in New York, and we can do the same for you. Contact our New York consumer rights attorneys today for a consultation.