THe Law Offices of
Peter N. Wasylyk
Ongoing Litigation
Class Action Complaint Against Citizens Bank, for Imposing Overdraft Fees:*
Gary Hunt, individually and on behalf of all others similarly situated, Plaintiffs, VS Citizens Bank; Filed in United States District Court, Court of Rhode Island, March 22, 2010
By default, Citizens, like many other banks, fails to notify customers when they overdraw; rather, they simply give them the extra money, and charge an overdraft fee -- $39 per instance, in the case of plaintiff Hunt. Even customers who check their balances immediately prior to withdrawal are susceptible to overdrafting, because balances are not always updated in a timely manner. The Federal Reserve Bank’s Regulation E, 12 C.F.R. 205.7 and 205.9 require financial institutions to provide an accurate receipt at the point of sale that includes the total cost and any fees associated with the transaction; Citizens fails to do this, relative to overdraft fees.
The lack of accurate account balance information, lack of prior warning that an overdraft fee will be imposed, and non-provision of a receipt detailing the fee amount to a breach of the covenant of good faith and fair dealing.
*An earlier version of this suit argued, based on a novel legal theory, that Citizens Bank’s overdraft fees (and, by implication, those of other banks) violate the Truth In Lending Act (TILA), because overdrafts are tantamount to a new line of credit, and TILA proscribes issuing a consumer a new line of credit without his or her full acquiescence. In response to our filing suit predicated on this legal theory, the Federal Reserve Bank swiftly issued new regulations which undercut our case. You may read more about their action here, at the Huffington Post, in an article authored by Peter Wasylyk and paralegal David Segal.
Class Action Complaint Against Citibank for Imposing Illegal Interest Rate Hikes:
Michol K. Murphy, individually and on behalf of all others similarly situated, Plaintiffs, VS Citibank; Filed in United States District Court, Court of Rhode Island, November 10, 2009
Citibank specifically promised customers that it would not raise APRs or change terms of its cardholder agreements before a card's expiration date, unless the cardholder was in default. The agreements read:
“We will not voluntarily increase your rates and fees or change other terms of this Agreement until your card expires, typically in two years. At that time, we will review your credit history and general market conditions. If we decide to make changes after our review, you will receive advance notice and a right to opt out. Of course, this paragraph does not apply to the automatic default APR and Prime Rate changes.”
In spite of this pledge, it raised APRs up to as high as 29.99% on customers who were party to the relevant cardholder agreements, and who had not defaulted and were making timely payments. It has therefor breached said contracts, and breached the implied covenant of good faith and fair dealing.
Class Action Complaint Against Bank of America, Regarding Late Crediting of Payments and Subsequent Fees and Charges:
Bruce J. Trombley and Ryan Sukaskas on behalf of themselves and all others similarly situated, Plaintiffs, VS Bank of America Corporation (BoA); Filed in United States District Court, Court of Rhode Island, November 24, 2008
Plaintiffs argue that Bank of America has violated the Truth In Lending Act (TILA) on the grounds that Bank of America systematically fails to properly post credit card payments and credit those payments on the date that BoA actually received such payments. BoA then assessed fees and charges to those customers, as though they had paid late; BoA has therefor illegally obtained millions of dollars because:
1) BoA breached its contracts, because it did not disclose to its customers in its Cardholder Agreement that payments would be credited late; and
2) It violated TILA, per the Federal Reserve Board's Regulation Z, Section 226.10, which states:
(a) General Rule. A creditor shall credit a payment to the consumer's account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge or except as provided in paragraph (b) of this section.
(b) Specific requirements for payment. If a credit or specifies, on or with the periodic statement, requirements for the consumer to follow in making payments, but accepts a payment that does not conform to the requirements, the credit or shall credit the payment within 5 days of receipt.
(c) Adjustments of account. If a creditor fails to credit a payment, as required by paragraphs (a) and (b)
of this section, in time to avoid the imposition of finance or other charges, the creditor shall adjust the consumer's account during the next billing cycle.
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