January 29, 2010
Local woman sues Citizens Bank

GOFFSTOWN - A Goffstown woman is the lead plaintiff in a class-action suit, filed Monday in federal court in Chicago, that alleges Citizens Bank charged millions in unlawful overdraft fees, often when customer accounts held enough money to cover overdrawn purchases.

The suit against Rhode Island-based Citizens Financial Group takes issue with bank practices that allow for overdraft fees when money is in accounts but earmarked for pending transactions that have yet to be settled.

The suit also faults Citizens for what it calls re-ordering of transactions. It said the bank places larger debits that take place later in the day ahead of smaller, earlier transactions in order to achieve overdraft status early on and collect more fees.

"The bank punishes customers and their families with these charges, causing further pain for families already stressed by the poor economic situation," said the lawyer in the case, Hassan Zavareei of Washington, D.C.

Zavereei said his client, Jessica Duval of Goffstown, contacted his firm about the overdraft charges.

New Hampshire Citizens Bank spokesman Kathleen Reardon company policy is to not comment on legal matters.

Zavereei said his firm has already sued TD Bank over similar practices and expects to bring suit in the coming weeks against other banks. He would not name the banks, but said his firm plans to sue six banks in total.

The suit alleges that Citizens Bank charged Duval overdraft fees of $22, $37 and $37 in late August, although she had money in her account to cover purchases.

For each debit, the suit claims that Citizens Bank constructed a "fictionalized account balance," which deducted pending charges before they had been settled. The suit also faults the bank for not lending or otherwise providing funds to cover the purchase.

And it claims Duval was able to make a $40 withdrawal at a Citizens Bank ATM, even though Citizens claimed she was overdrawn.

Zavereei said Duval is the only plaintiff at this time, but he expects the list will grow once the suit advances. If the suit is successful, Duval would likely receive reimbursement of fees as well as a class representative award that could range from $5,000 to $25,000, Zavereei said.


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