Are you, by any chance, a current or former customer of NBT Bank? If so, you might have heard of the Debaere Overdraft Fee Settlement. If not, don’t worry. We’re here to break it down for you. Stick with us, and you’ll learn all about this class-action lawsuit, what it’s about, and why it matters.
Settlement Background
The Debaere Overdraft Fee Settlement is all about a class-action lawsuit that was brought against NBT Bank. The bank agreed to settle the lawsuit for a whopping $5.7 million. Of this amount, $4.25 million is to be paid in cash to current and former customers, while the remaining $1.5 million will go towards waiving uncollected overdraft fees.
But how did it all start? Well, it was alleged that NBT Bank had been unfairly assessing and collecting overdraft fees on certain transactions. And that’s what led to the lawsuit.
Allegations Against NBT Bank
The lawsuit alleged that the bank was engaged in a practice known as “Authorize Positive, Purportedly Settle Negative Transactions” or APPSN transactions for short. In these transactions, the bank was said to be charging overdraft fees even when there were sufficient funds set aside to cover the transactions at the time they were authorized. Sounds unfair, right? The court thought so too.
This practice was seen as a violation of the account agreements between the bank and its customers. It was also viewed as a breach of the implied covenant of good faith and fair dealing. So you can see why the lawsuit was filed.
APPSN Transactions & NSF Fees
APPSN stands for “Authorize Positive, Purportedly Settle Negative Transactions.” It’s a bit of a mouthful, but here’s what it means. These are transactions where the bank authorizes a payment when your account has enough funds, but later charges an overdraft fee when the transaction is settled, and by then, your balance has dropped.
NSF, on the other hand, stands for Non-Sufficient Funds. You might have seen this term on your bank statement if you’ve ever had a check bounce or a debit transaction declined because you didn’t have enough money in your account. NSF fees are what the bank charges you when this happens.
The lawsuit alleged that NBT Bank was charging its customers these fees unfairly. And that’s why the Debaere Overdraft Fee Settlement came to be.
Settlement Agreement Details
When NBT Bank decided to settle the lawsuit, they agreed to a hefty sum of $5.7 million. This wasn’t just a random figure. The bank had to make things right with its customers. Given the allegations of unfair charges, the settlement amount was seen as a fair deal. The bank was to pay $4.25 million in cash to its current and former customers. On top of that, they were to forgive or waive $1.5 million in uncollected overdraft fees.
But that’s not all. The bank also had to agree to some changes in its practices. They committed to stop charging APPSN fees for a period of three years following the settlement. This was a significant win for the customers, as it meant they could avoid these unfair charges in the future.
Distribution Of Settlement Funds
The $5.7 million wasn’t just going to be handed over to the customers. It had to be divided in a way that was fair and equitable. Here’s how it was broken down:
Approximately $2.9 million was set aside for customers who were charged APPSN fees. This was a huge chunk of the total fund. Another $1.3 million was allocated for customers who were charged retry NSF fees. This meant that a substantial amount of the settlement was going directly to the customers who were affected the most by the unfair charges.
Eligibility Criteria For Class Members
The criteria were pretty straightforward. Class members were defined as all current and former bank customers with consumer checking accounts who were charged relevant fees between December 4, 2013, and November 30, 2021.
If you fell into this category, you were automatically considered a class member and were entitled to your pro rata share of the settlement fund. And the best part? You didn’t even need to prove harm. The court recognized that the mere fact of being charged these fees was harm enough.
Other Settlement:
How To Claim Your Share Of The Settlement?
If you were a class member, you didn’t have to lift a finger. You were automatically included in the settlement class, and you would receive your share without having to take any action.
The funds were to be distributed via check or account credit. For current customers, the bank credited the settlement amount directly to their account. Former customers, on the other hand, were sent a check to their last known address. So, if you were part of the settlement class, keep an eye on your mail or bank account. You could have a nice surprise waiting for you!
Court Approval & Legal Proceedings
With all the nitty-gritty of the settlement agreement covered, let’s move on to the important milestone in this case: The court approval. It’s crucial to mention that the U.S. District Court for the Northern District of New York played a pivotal role here. They granted the final approval of the settlement on April 22, 2022. This was a significant moment, marking the end of a lengthy legal process and the start of a new chapter for those affected.
The court’s decision wasn’t made lightly. It was the result of careful consideration of all the evidence presented during the legal proceedings. After weighing the merits of the case against the potential risks and costs of moving forward with litigation, the court determined that the settlement was fair, reasonable, and in the best interest of the class members.
This approval was more than just a formality. It was a strong indication that justice was served. It was a nod to the fact that the bank had to rectify its practices and compensate the customers who were unjustly charged. And that’s something we should all be aware of and appreciate.
Conclusion
Well, if you’re a class member, there’s good news. You don’t need to do anything to claim your share of the settlement. The distribution of funds is automated, so you’ll receive your pro rata share without having to lift a finger.
Current customers will find the settlement amount credited directly to their account. If you’re a former customer, keep an eye on your mailbox. A check with your share of the settlement will be sent to your last known address.
But the settlement isn’t just about the money. It’s also about the changes that NBT Bank has committed to make in its practices. The bank has agreed to stop charging APPSN fees for a period of three years following the settlement. This means that, for the time being, you can conduct transactions without worrying about those extra charges.
If you still have questions or concerns about the settlement, don’t hesitate to reach out to the bank or seek legal advice. After all, it’s your right to be informed and to understand what this settlement means for you.
