CINCINNATI, Ohio — A Cincinnati-based financial institution is facing allegations of imposing excessive overdraft fees on debit transactions, even when customers had sufficient funds to cover their purchases. Christy Hunter of Georgia and Feon Smith-Branch of West Virginia initiated the lawsuit on October 5 in the U.S. District Court in Cincinnati. The legal team is pursuing class-action status for customers who have opted for or declined overdraft protection from the bank.
The core issue revolves around the timing of debit card transactions and their subsequent processing. The lawsuit contends that Fifth Third charges overdraft fees on approved transactions, despite immediately deducting the required funds from customers’ accounts when they swipe their debit cards. Curiously, these same covered transactions are subjected to overdraft charges if other transactions result in a negative balance days later.
The lawsuit argues that this practice contradicts the bank’s own terms and commitments to checking account customers, which explicitly promise not to charge overdraft fees unless a transaction goes through when there are insufficient funds.
The bank is accused of exploiting its contractual discretion for the purpose of maximizing overdraft fee revenue, a practice deemed unjustifiable in the eyes of the lawsuit.
Fifth Third has declared its intent to defend against the allegations vigorously, with a general statement emphasizing their efforts to provide financial strength and eliminate certain fees for consumer accounts.
The lawsuit seeks a declaration by the court that Fifth Third’s practices are wrongful and unconscionable, alongside an order preventing the bank from violating its checking account agreements with customers. The lawsuit also pursues unspecified restitution, damages, and legal and court costs.
Fifth Third, headquartered on Cincinnati’s Fountain Square, stands as the largest financial institution in the Cincinnati and Northern Kentucky region in terms of branches, with 100 local offices. It ranks second in terms of deposits, trailing only U.S. Bank, with $50 billion according to the Federal Deposit Insurance Corp. With over $206 billion in assets, Fifth Third is the 17th largest commercial bank in the nation, according to the Federal Reserve.