Dollar Bank Hit with Lawsuit in Pennsylvania Over Allegedly Unlawful Overdraft Fees

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Dollar Bank FSB faces a proposed class action over its alleged practice of charging overdraft fees to customers whose accounts were never actually overdrawn.

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The lawsuit, filed August 2 in the Allegheny County, Pennsylvania Court of Common Pleas, alleges Dollar Bank has breached the express terms of its account documents by imposing $36 overdraft fees on transactions for which the customer’s account contained sufficient funds. According to the breach of contract case, the defendant’s allegedly unlawful practice has financially injured customers while lining the bank’s pockets.

Related Reading: Devore v. Dollar Bank

“Through the imposition of these fees, Dollar has made millions of dollars, turning its customers’ financial struggles into revenue,” the complaint scathes. “Plaintiff, like thousands of others, has fallen victim to Dollar’s Overdraft Fee revenue maximization scheme.”

The lawsuit explains that Dollar’s deposit agreement and related documents governing customers’ accounts specify that the bank will only charge overdraft fees when it decides to pay a transaction for which there were insufficient funds in a customer’s account. Contrary to these representations, however, Dollar Bank has, according to the case, assessed overdraft fees on transactions that did not overdraw the account.

The plaintiff, an Apollo, Pennsylvania resident, says she was assessed a $36 overdraft fee on November 17, 2019 for a debit transaction when her account, as substantiated by her account statement, “was not even negative after that transaction.” Dollar’s assessment of an overdraft fee on a transaction that did not overdraw the plaintiff’s account was therefore a breach of the bank’s account documents, the lawsuit alleges.

According to the suit, Pennsylvania law dictates that parties to a contract are required to act in good faith when they maintain discretionary power over the other party, as Dollar Bank does in this case. The lawsuit claims the bank abused its discretionary power by using such to “enrich itself and gouge its customers.”

“Indeed,” the complaint reads, “Dollar has a duty to honor transaction requests in a manner that is fair to Plaintiff and is prohibited from exercising its discretion to pile on ever greater penalties. … Instead of exercising that discretion in good faith and consistent with Plaintiff’s reasonable expectations, Dollar abuses that discretion to take money out of Plaintiff’s account without her permission and contrary to her reasonable expectations that she will not be charged Overdraft Fees on transactions that do not overdraw her account.”

The plaintiff looks to represent Pennsylvania citizens who have checking accounts with the defendant and who, during the applicable statute of limitations, were charged overdraft fees on transactions that did not overdraw an account.

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