Week Adjourned: 8.6.10

Top Class Actions

Could Say He was Over his Overdraft Fees. I think these guys deserve a Business As Usual, As Usual award. Commerce Bancshares, a Kansas City-based financial institution operating simply as Commerce Bank in the state of Missouri is being sued by a client who claims the company’s bank overdraft fees violate state law.

The plaintiff, Harold J. Joseph Jr., has accused the banking chain of manipulating the sequence of debit card purchases in an attempt to maximize the number and size of overdraft fees that they can impose. 

Any of this sound familiar? Excessive bank overdraft fees lawsuits have been filed and/or settled against a variety of banks, including Wells Fargo, Bank of America, M&T Bank and Wachovia. The lawsuits allege that banks charge excessive overdraft fees when customers’ accounts go into overdraft. They further allege that the banks use a number of unethical practices to push their accounts into overdraft, such as misrepresenting customers’ account balances and reordering debits and credits to accounts.

New regulations that will take effect by mid-August seek to rectify this problem by making overdraft protection an opt-in service and by regulating the terms of the action.

FYI: Information about Commerce Bancshares second quarter earnings were posted in a press release July 21. Those of you hit with excessive overdraft fees may find the numbers interesting…”Commerce Bancshares announced earnings of $.71 per share for the three months ended June 30, compared to $.53 per share in the previous quarter and $.46 per share in the second quarter of 2009. In a release dated July 15, the Company said net income for the second quarter amounted to $59.7 million compared to $44.2 million in the previous quarter and $37.0 million in the same period last year.” Some of that your money, perhaps?

PS—we just got word from attorney Jeff Kaliel of Tycko & Zavareei that his firm is continuing its investigation into smaller banks (think local or regional) that may have been charging excessive overdraft fees. Most of the press has been on the big guys—you know, BoA, M&T…the ones you know just by their initials, but this makes you wonder what’s been going on right in your backyard, huh? According to Kaliel, his firm is investigating banks like Cathay Bank, Mountain West Bank, Columbia Bank, Eagle Bank and Umpqua Bank, to name a few. Maybe I ought to check that statement I just got in the mail…

Top Settlements

Raindrops Keep Fallin’ on my Head…from in my car? A $69 million settlement was approved by a US magistrate judge in Newark, this week, ending litigation brought by owners of Volkswagens and Audis whose interiors leaked during rainstorms.

The suit was originally filed against Volkswagen of America Inc. and its subsidiaries, including Audi. It included about three million vehicles and 5.5 million class members. Toyota, take notice…

The vehicles involved in the suit were Volkswagen Passat, Jetta, New Beetle, Golf and Touareg and Audi A4, A6 and A8 models made between 1997 and 2005. The suit alleged two design defects in the vehicles, which allowed water to enter the passenger compartment near the dashboard and sunroof, in some cases damaging electronic components or ruining the carpet. 

Seroquel Sequel. AstraZeneca (AZ) has reportedly tentatively settled a further 4,000 lawsuits brought by people who allege the company’s antipsychotic medication Seroquel causes diabetes.

The terms of the settlements will be kept confidential. However, the company recently settled 200 similar suits for $2 million putting the average settlement at $10,000 per case.

AZ was facing more than 10,000 related suits involving some 22,500 plaintiff groups. The company reportedly said it has spent about $688 million defending Seroquel-related cases to date.

Ok. That’s it for this week. I hear the bar calling my name…