Bank’s Overcharging Customer Fees on Overdraft Accounts Not Covered by Professional Liability Insurance Policy and Insurer Granted Judgment in Coverage Dispute

Amicus Curious

On August 7, 2013, a federal district court in Georgia ruled a bank was not entitled to insurance coverage for a settlement entered into with customers, the plaintiffs in a class action lawsuit (the underlying suit), in which the bank settled with the plaintiffs on charges of wrongfully overcharging for overdraft fees.  Fidelity Bank v. Chartis.U.S.D.C Ga. August 7, 2013.

The bank would charge a fee of $29 each time a customer sought to pay by check or debit an amount in excess of the balance on his or her account.  The $29 fee was charged regardless of the amount of the overdraft created.  So, for example, if a customer with $1.30 on his or her account purchased a cup of coffee for $2.00, the bank would cover the purchase, and then charge its customer $29 in addition to the amount of the purchase (sometimes called a convenience…

View original post 1,770 more words