Citibank Charges Depositors Unlawful Junk Fees When Checks Bounce, Class Action Claims

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action lawsuit accuses Citibank of charging an unfair $12 “junk fee” to customers who, through no fault of their own, deposit checks that bounce.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

The 22-page lawsuit alleges that the bank’s penalty for faulty checks is unfair because innocent customers have no reasonable way of knowing a check will bounce and lack any control over whether the deposit will be returned.

The suit contends that Citibank, by charging customers even though they “did nothing wrong and could not have avoided the fee through reasonable diligence,” has acted in a manner that is “unfair, oppressive, and against public policy.”

The case takes issue with the fact that Citibank’s so-called “deposited check returned unpaid fee” is not disclosed in accountholders’ contracts with the bank.

“A consumer cannot reasonably expect to be charged a fee for a Return Deposit Item where that fee is not disclosed in the Deposit Agreement,” the complaint contends.

According to the filing, state law expressly prohibits financial institutions from charging such “junk fees,” which the lawsuit argues are “nothing more than veiled revenue-generating tools that penalize innocent depositors for the actions of others.”

In addition, the Consumer Financial Protection Bureau (CFPB), in a November 2022 bulletin, asserted its concerns about “deceptive practices” with respect to banks assessing fees to customers who deposit bad checks, the suit relays. Per the case, the CFPB reiterated the allegedly unfair and “unlawful nature” of Citibank’s fee policy, “particularly in instances where fees are disproportionate to the actual costs incurred by the bank, or where customers are not adequately informed about the fees and their potential applicability.”

The lawsuit looks to represent anyone in the United States who, during the applicable statute of limitations period, has or had a Citibank account and was charged a “deposited check returned unpaid” fee by the bank.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.