In 2024, Capital One Bank reached a significant settlement in a class-action lawsuit related to its practice of charging representment fees on checks and Automated Clearing House (ACH) transactions.
These fees were applied when transactions initially bounced due to insufficient funds but later cleared once sufficient funds became available.
The lawsuit argued that these fees were unfair and should not have been charged if the account eventually covered the transaction.
This article provides all the essential details about the settlement, including eligibility, potential payout amounts, and tips on avoiding such fees in the future.
Capital One Bank Class Action
The lawsuit against Capital One centered on the bank’s practice of charging representment fees, which many customers found to be unjust. Representment fees occur when a bank reprocesses a transaction that previously failed due to insufficient funds (NSF).
Even if the transaction later clears successfully, Capital One was still charging a fee, leading to this legal action.
The lawsuit claimed that such fees were unwarranted and that customers should not be penalized once their account balance was sufficient to cover the transaction.
Settlement Details
In June 2024, a settlement of $16 million was reached, marking the conclusion of the lawsuit. The settlement covers representment fees charged between September 1, 2015, and January 12, 2022.
The money from this settlement will be distributed among eligible claimants who filed within the court-established window.
While the claims window for this settlement is likely closed, the distribution of the settlement money is expected to occur sometime in June 2024.
Account holders who were charged these fees and filed a valid claim should regularly monitor their bank statements or online banking platforms for any updates regarding their settlement payment.
Eligibility Criteria
To qualify for a share of the settlement, individuals had to meet specific criteria:
- Account Holder: You were a Capital One account holder during the specified period between September 1, 2015, and January 12, 2022.
- Fees Charged: You were charged representment fees on checks or ACH transactions.
- Successful Transaction: The transactions in question later cleared successfully after initially failing due to insufficient funds.
If you met these criteria and filed a claim within the designated window, you should be eligible for a portion of the settlement. However, if you did not file a claim during the required timeframe, you may no longer be eligible to receive any settlement money.
Settlement Amounts
The total settlement amount of $16 million will be divided among all eligible claimants. The actual amount each individual receives depends on the number of valid claims filed.
Since the settlement is shared among a large group of people, individual payouts may vary, and the amount each claimant receives will depend on the total number of claimants and the specifics of their claims.
Important Distinction: Data Breach Lawsuit
It’s important to note that this settlement is separate from the 2019 Capital One Data Breach lawsuit. The data breach settlement was resolved in 2022, with a different set of eligibility criteria and deadlines.
However, those affected by the data breach may still be eligible for identity theft protection services until February 13, 2028, even if they did not file a claim.
Protecting Yourself from Future Fees
While this lawsuit addressed unfair bank charges, it serves as a reminder of the importance of monitoring your bank accounts closely. Here are some tips to help you avoid similar fees in the future:
- Maintain Sufficient Funds: Ensure your account always has enough money to cover checks and debits to avoid NSF situations.
- Monitor Transactions: Regularly check your bank statements and online banking portal to track your transactions and identify potential issues early.
- Challenge Unfair Fees: If you believe a fee has been charged unfairly, contact your bank. Many banks are willing to reverse fees if you explain the situation.
Understanding your rights as a consumer and staying informed about your bank’s practices can help you avoid unnecessary charges and protect your finances.
FAQs
Who is eligible for the Capital One settlement?
Capital One account holders charged representment fees between September 1, 2015, and January 12, 2022, are eligible.
How much money will I receive from the settlement?
The amount depends on the total number of valid claims and the specifics of your claim.
When will the settlement payments be made?
Payments are expected to be distributed in June 2024.
What should I do if I missed the claims window?
Unfortunately, if you missed the filing deadline, you may not be eligible for a payout.
How can I avoid representment fees in the future?
Maintain sufficient funds in your account, monitor your transactions regularly, and challenge any unfair fees with your bank.
