Judicial papers revealed in a Miami federal court after long running debates that J.P. Morgan Chase should be held accountable. J.P. Morgan Chase isn`t the first bank to pay out. Last year Bank of America made paid $410 million payment to settle their similar lawsuit. Wells Fargo will have to pay approximately $200 million.
In some situations customers use their debit cards without having enough money on their accounts, which gives a bank an excuse to overcharge those customers a $35 fee for each purchase. In many cases these purchases cost less than the $35 overdraft fee. That`s where you get a symbolized $38 cup of coffee – when a consumer`s debit card allows them to purchase a $3 cup of coffee when the funds are not available, and they are subsequently charged a large overdraft fee.
The biggest complaint was that banks no longer analyze purchases from the highest to the lowest. The majority of banks, today, like J.P. Morgan, refused to analyze the purchases and just charged fees in order for you make those purchases.
The point of the regulation was to let customers decide whether they would give consent for the bank to charge the fees or allow the bank to reject the purchase.
In the spring of 2010, J.P. Morgan changed their overdraft policies and inducted an “opt-in” system. With this system, overdrafts that were less/or $5 were excluded.
Last week, the bank was “pleased to have reached an agreement in principal”, as per bank`s representative.
One of the managing partners at PodhurstOrseck and co-lead counsel for the plaintiffs – Aaron Podhurt, stated that the settlement with J.P. Morgan is “a fair, adequate and reasonable settlement for our class members, and we expect it will eventually be approved.”
Bank of America is more insecure about these regulations than other banks, mainly because its accounts weren`t a subject to judicial regulations, which other banks have typed in a small print. These arbitrations are likely to be a stumbling block for Bank of America.
Some of the banks affected by the lawsuit include Wells Fargo, U.S. Bancorp, Citigroup, Huntington Bancshares Inc. and SunTrust Banks Inc.