Capital One is Accused of Imposing Illegal Overdraft Fees on Customers

The 2nd U.S. Circuit Court of Appeals in Manhattan has revived a proposed class action lawsuit against Capital One Financial Corp. on Friday.

The lawsuit alleged that Capital One had imposed illegal overdraft fees on its customers.

The Federal Appears Court has fond that Capital One’s overdraft fee rules were ambiguous. It concluded that a lower
court judge was wrong to dismiss a breach of contract claim and has revived a claim under the state’s consumer protection law.

Tawanna Roberts is the plaintiff in the lawsuit and is a Capital One customer in the Bronx, New York. Roberts’ lawyer Matthew Wessler commented, “We’re pleased with the outcome. Capital One illegally extracted overdraft fees for purchases that were made when consumers had enough funds in their accounts.”

Roberts alleged that Capital One had illegally imposed overdraft fees when it had settled transactions the time it paid merchants and not when it authorized the transactions at the cash register.

According to Capital One, the company has sole discretion to “elect to pay checks and other items drawn on your deposit account or to permit automatic bill payments and withdrawals against your account for an amount in excess of your available balance (an ‘Overdraft’).”

Capital One did not comment on the revived claim.