About 2.7 million people were notified this month that Minneapolis-based U.S. Bank owes them refunds as part of a $55 million overdraft settlement. The deal resolves claims that the lender for years erroneously inflated overdraft fees by reordering debit-card transactions so that charges posted in order from the largest amount to the smallest instead of in the sequence in which they actually occurred.The practice can drain accounts more quickly and more often, causing the customer to incur multiple fees.
The U.S. Bank refund checks most likely will start hitting mailboxes next summer, pending a final hearing in December and court approval. They will not, however, return to consumers all of the money they paid for re-ordered transactions, as the settlement total represents just 13 percent of the estimated total damages. That is a low share compared to what Union Bank and other defendants have paid in similar cases, likely because U.S. Bank tried to arbitrate out of court.