Credit Union to Pay Millions in Class-Action Lawsuit

Credit Union to Pay Millions in Class-Action Lawsuit Credit Union to Pay Millions in Class-Action Lawsuit Credit Union to Pay Millions in Class-Action LawsuitInside Subprime: Oct 31, 2018By Lindsay FrankelA credit union is paying out a multimillion-dollar settlement after an ongoing legal battle over a class-action lawsuit regarding overdraft protection fees.  The worlds largest credit union will pay $25 million for wrongful, “optional” overdraft protection fees on debit card charges, according to the U.S. District Court for the Southern District of California in San Diego, which approved the preliminary deal in late October.The credit union is based in Vienna, Virginia, and has millions of customers, including retired and active-duty servicemembers, Department of Defense workers, and family members. It’s worth more than $80 billion. In June 2017, two customers filed a lawsuit in San Diego against the credit union for violation of contract. The two plaintiffs, Jenna Lloyd and Jamie Plemons, claimed that they were hurt financially from the overdraft protection fees, which were char ged despite the customers having sufficient funds in their checking accounts to cover their transactions using a debit card. They claimed that the language in their checking account contracts didn’t allow the credit union to charge the fees, according to a Law360 article. Though the case could have led to even more millions had it gone to trial, the plaintiffs accepted the settlement to prevent the credit union from winning before a jury. Anyone who was charged one of those “optional overdraft protection fees” when they had money in their accounts from July 2012 to November 2017 is eligible for a payout. That could be thousands of customers, according to the plaintiffs. Experts will use credit union data and a formula to figure out who was affected and by how much, so those eligible to receive money from the credit union wouldn’t have to pursue claims, as is often the case in class-action settlements.This isn’t the first time this credit union has had to shell out. In Octo ber of 2016, the Consumer Financial Protection Bureau blasted them for misrepresentation of “credit consequences” like bad credit from falling behind on loans, “using false threats to collect debt,” and freezing accounts and bank cards when loans became delinquent. The CFPB ordered them to pay $23 million at the time and estimated hundreds of thousands of people were affected.For more information about scams, subprime loans and predatory payday loans, check out all of our Subprime Reports including Illinois, Florida, Texas and more.Visit  OppLoans  on  YouTube  |  Facebook  |  Twitter  |  LinkedIn