A proposed class action lawsuit alleges TD Bank, N.A. has made a routine practice of opening accounts without consent in order to pocket fees, an apparent scheme the plaintiff likens to Wells Fargo’s unauthorized accounts scandal that shook the banking industry in late 2016.
Once news of Wells Fargo’s brazen fraud and the resulting big-money regulatory fines was out in the open, several banks, including TD, commenced internal reviews of their own to determine if there existed similar issues pertaining to unauthorized activity, the lawsuit begins. Following an internal audit in November 2016, a “source familiar with the process” indicated TD Bank found no systemic issues akin to those rampant within Wells Fargo, the case says.
Though TD Bank attempted to ease any concern that it had an unauthorized account problem of its own, the plaintiff, a customer since 2005, alleges her experience with the defendant in April 2020 indicates otherwise.
Per the suit, TD’s Personal Deposit Account Agreement authorizes the bank to terminate or close an account at any time but does not allow the bank to open or re-open an account. According to the complaint, the plaintiff’s TD checking account was closed by the bank on April 15 without notice. That same day, the suit says, the bank issued the plaintiff a check for the balance of her account, which was noted on her April 2020 bank statement.
The lawsuit stresses that while the plaintiff was provided with no explanation or documentation regarding the closure of her account, the account was not shuttered due to being overdrawn or for any other financial issue.
According to the lawsuit, although the plaintiff’s account was closed on April 15, TD re-opened the account in the plaintiff’s name on April 17 without her knowledge or permission. The complaint claims TD Bank re-opened the plaintiff’s account for at least four improper reasons, including:
To reverse a $12.31 provisional credit previously issued to the plaintiff;
To process a $35 check that the plaintiff had written prior to her account’s closure;
To assess the plaintiff a $4.99 monthly maintenance fee; and
To assess other “bogus” fees amounting to “nearly 100% profit for TD.”
The lawsuit explains that on April 20, TD Bank refused to pay the plaintiff’s $35 check and assessed her a $35.00 Overdraft-Returned fee followed by a $35 Overdraft-Paid fee for the provisional credit reversal.
“Thus, by secretly opening or re-opening an account in [the plaintiff’s] name without her authorization, TD Bank was able to generate $74.99 in fee-based income,” the case alleges. “It had essentially no expenses or risks to justify these fees. The fees were pure profit to TD.”
On April 22, the plaintiff’s tax refund was deposited into her new or re-opened account, the lawsuit continues. The case claims that because TD assessed nearly $75 in fees on the ostensibly new account, the bank took more than $87 of the plaintiff’s tax refund in order to cover the purportedly negative balance.
On April 28, TD closed the account in the plaintiff’s name without explanation, the suit states, alleging the woman’s experience is “not isolated, but rather is illustrative of Defendant’s improper business practice.”
The 16-page lawsuit looks to cover all persons who, within the applicable statute of limitations period, had a checking or savings account opened in their name by TD Bank without authorization.
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