$5M USAA Settlement Ends Class Action Lawsuit Alleging Unlawful Retention of Interest Collected on Late Fees

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United Services Automobile Association (USAA) and its subsidiaries have agreed to a $5,000,000 settlement to wrap up a class action lawsuit alleging that the insurance providers unlawfully retained the interest collected on late fees that the Maryland Insurance Administration (MIA) ordered USAA to return to policyholders after it altered its billing plans in 2011.

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The USAA class action settlement received preliminary approval from the court on December 16, 2025 and covers all individuals who received late fee refunds, but not the interest collected on the late fees, from a consent order signed in 2020 between USAA and the MIA that ordered late fees be returned to policyholders who did not pay their premiums on time after the 2011 billing changes.

The court-approved website for the USAA late fees settlement can be found at USAALateFeeLitigation.com.

According to the settlement site, USAA settlement class members do not need to do anything to automatically receive a settlement payment. The final amount of this payment, the agreement outlines, will depend on how many late fees a class member was charged and how long ago they paid them, as well as the total number of class members.

Related Reading: USAA Refuses to Pay Lessees Proper Payout Amount for Totaled Cars, Class Action Says

The settlement agreement adds that for current policyholders, payments will be issued in the form of a statement credit, and for former policyholders, payments will be issued in the form of a check.

Any funds remaining in the net settlement fund nine months after settlement checks were initially issued to class members shall be issued to the Wounded Warrior Project and Face the Fight as cy pres awards, the agreement reports.

Consumers who would like to ask to be excluded from or object to the USAA settlement must send the settlement administrator a written notice of their decision, which must include their name, address, contact information, and the last four digits of their current or former USAA policy number, among other information.

The court will determine whether to grant final approval to the USAA class action settlement at a hearing on April 28, 2026. Compensation will begin to be distributed to class members only after final approval is granted and any appeals are resolved.

The USAA class action lawsuit alleged that the insurance provider and its subsidiaries, following a market conduct examination by the Maryland Insurance Administrator, failed to issue to consumers the interest it collected from unlawful late fees that were refunded to policyholders as required by a 2020 consent order.

Related Reading: Western Union Unlawfully Invests, Earns Interest On Money from Failed Transfers, Class Action Alleges

“[P]ursuant to [the Consent Order,] Defendants refunded all Late Fees charged to Maryland policyholders between August 27, 2011 and January 23, 2019. It likewise issued refunds for policyholders charged late fees greater than $10 from January 23, 2019 to September 30, 2019. MIA did not require Defendants to pay interest on charges being refunded, but the Consent Order permitted civil actions in connection with the proceedings,” court documents state.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest open class action settlements.