Multiple Banks Are Being Investigated For A Class Action Lawsuit
Banks are currently under investigation for a class action lawsuit allegedly charging foreign transaction fees for online shopping transactions.
The Class Action Lawsuit
Multiple consumers file for a class action lawsuit after being charged by banks for foreign transaction fees.
According to plaintiffs, banks charge their online shopping transactions with foreign exchange fees.
The following banks have been initially identified for investigation since they may charge the said fees to their customers:
- Central Pacific
- Liberty Bank (CT)
- Washington Trust (RI)
According to the lawsuit, the customers were in their home country when the online transaction was made.
However, since they have used a foreign website during the transaction, they were charges with foreign transaction fees.
The lawsuit asserts that consumers should not be charged for international processing fees, even if a foreign website was used.
Class Member Eligibility
Individuals are eligible to join the class action lawsuit investigation if they meet the following criteria:
- Individuals who made an online shopping transaction on a foreign website (the company is from another country)
- The bank charged individuals with foreign exchange fees or foreign transaction fees, or any international processing fees
- They have used their debit card or credit card during the transaction
- The online transaction was made while the customer is at home or in their country
Eligible individuals will need to submit a form to join the class action lawsuit investigation and be considered for potential compensation.
The lawsuit aims to compensate customers for the unnecessary fees charged to them from their online transactions.
Aside from reimbursing the fees charged to them, customers may also be given additional compensation due to damages that occurred.
Foreign Transaction Fees Overview
The bank charges foreign transaction fees or foreign exchange fees to convert a transaction into foreign currency.
The fees allow banks to earn percentage-based income from bank transactions.
FX fees can range from 1% – 3% of the total bank transaction. A fragment of this amount goes to payment processor companies such as Visa or Mastercard, while the rest goes to the bank that issued the card used for the transaction.
Some bank holdings, link Capital One and Discover, do not charge their consumers for foreign transaction fees (FX fees).
Other banks offer no FX fees for transactions to nearby countries only. This is to cater to individuals visiting neighboring countries.
However, most banks still charge their customers for foreign transaction fees.
Related Class Action Lawsuits
Class action lawsuits have been filed against banks for allegedly charging customers with international processing fees.
One of which is a class action lawsuit filed against Bank of America (BoA) by plaintiff Andrea F. Durkee.
According to the plaintiff, the said bank charges customers with high fees, including a 3% foreign transaction fee and a $5 out-of-network ATM fee.
She adds that the bank has breached its policy by charging the percentage-based fee on top of the ATM fee.
Lawyers are investigating banks and other financial institutions for the same issue.
According to them, while it is not unlawful to charge individuals for FX fees, doing so may go against some of the bank’s own terms and policies.
Some United States banks explicitly state in their contracts that they do not charge FX for online foreign transactions.
Editor’s Note on Banks Foreign Transaction Fees Class Action Investigation:
This article is published to inform you of the latest class action lawsuit investigation against banks allegedly charging customers FX fees for online transactions.
What are your thoughts on this piece? Have you been charged an FX fee for an online transaction?
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You might be interested in reading about Class Action Lawsuits For Beginners.