Citizens Bank, which has branches in Erie and Crawford counties, has agreed to pay $137.5 million to resolve a claim that the bank manipulated transactions to produce more overdraft fees.
Florida-based Citizens, which operates more than 1,500 retail branches, has been involved in a case pending in U.S. District Court.
According to a news release regarding the settlement, the lawsuit claims Citizens Bank used software programs designed to extract the greatest possible number of overdraft fees from its customers.
The lawsuit, according to PR Newswire, claimed the bank re-sequenced its customers’ debit card and ATM transactions by posting them in highest-to-lowest dollar amount, rather than in the actual order in which the transactions took place.
The suit claimed this bookkeeping practice resulted in customers being charged substantially more in overdraft fees than if their debit card and ATM transactions had been posted in the order in which they were authorized.
“This is an outstanding recovery for Citizens’ customers who were affected by this practice,” said Robert Gilbert, an attorney representing the plaintiffs. He expects the settlement with Citizens Bank to be presented to the Court for approval later this year.
Citizens Bank is not the first bank involved in this litigation to settle similar claims. Last year, the Court approved a $410 million settlement with Bank of America.