National City Bank Customers Could See Overdraft Refunds

National City Bank customers who were wrongfully charged for overdrafts would be eligible for refunds under a class action settlement tentatively approved by a Washington, D.C., judge.

Judge John Bates gave preliminary approval to a $12 million settlement in a class action that allegedNational City improperly charged overdraft fees on debit card transactions and provided false information about account balances.

The plaintiffs charged that National City, now owned by PNC, reordered debit transactions in a manner that depleted available funds as quickly as possible to increase overdraft fees.

Settlement class members will receive $36 for each an eligible overdraft charge incurred on debit transactions between July 2004 and August 2010.

The allegations in the lawsuit mirror the experiences of Veronica of Sauget, IL, who complained to ConsumerAffairs.com last January.

“They get a little crazy with the overdraft fees meaning I can't pay my bills this month because I just paid enough in overdraft fees to pay someone's salary for the week,” she said.

Kim of Milwuakee, WI, said the bank“charged me overdraft charges on my savings and checking, 3 times, for a $59 debit they put through twice … Now I'm out $75 for something they didn't even pay with overdraft protection that does not exist.”

Under the terms of the agreement, class members can be compensated for an unlimited number of overdraft charges incurred in any two calendar months during the class period. The months do not have to be consecutive.

Judge Bates said he restricted compensation to two months to prevent “chronic overdrafters … from being unjustly rewarded for their behavior.”

The next hearing in the case, to determine the fairness of the settlement, is set for June 13.

The full text of Bates' ruling is available online.