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JPMorgan Chase reaches $110 million preliminary overdraft settlement

JPMorgan Chase reached a $110 million preliminary settlement this week with customers in a class-action lawsuit involving claims that the financial giant overcharged customers on checking account overdraft fees.

“We’re pleased to have reached an agreement in principle,” Patrick Linehan, a JPMorgan spokesman, said in an emailed statement, according to the San Francisco Chronicle.

More than 30 banks were sued because of their overdraft fee policies. The customers claimed that banks repeat debit card transactions electronically to maximize fees.

The complaint alleged that Chase and Washington Mutual “either refused to allow their customers to opt out of overdraft protection or failed to adequately disclose to their customers that they may do so,” the San Francisco Chronicle reports. “In many instances, these overdraft fees cost the banks’ account holders hundred of dollars in a matter of days, or even hours, when they may be overdrawn by only a few dollars.”

In November, several banks reached similar settlements with customers, with Union Bank paying $35 million and Associated Bank paying $13 million. Bank of America, the nation’s second-largest bank by assets, paid $410 million to customers without admitting liability. To date, it is the largest settlement in the litigation.

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