RETURN DEPOSIT ITEM FEES
Miles v. Fifth Third Bank N.A.
Date: April 3, 2024
Issue: Whether Fifth Third unlawfully charged consumers Return Deposit Item Fees after customers tried to deposit bounced checks.
Case Summary: Three customers sued Fifth Third alleging it unlawfully charged consumers Return Deposit Item Fees for attempting to deposit bounced checks.
Return Deposit Item Fees are charged when a check is returned because it cannot be processed against the originator’s account. In October 2022, the Consumer Financial Protection Bureau (CFPB) issued a compliance bulletin declaring it is an unfair act or practice for an institution to have a blanket policy of charging Return Deposit Item Fees anytime a check is returned unpaid, whatever the circumstances or patterns of behavior on the account. The CFPB noted return deposit item fees cause substantial monetary injury for each returned item, which consumers cannot reasonably avoid because they lack control over whether a check will clear.
A group of customers sued Fifth Circuit in Ohio federal court, claiming it imposed a blanket policy of assessing Return Deposit Item Fees. The Deposit Agreement allegedly confirms Fifth Third had a blanket policy of charging a Return Deposit Item Fee on attempted deposits that were returned unpaid. By charging Return Deposit Item Fees, the Customers claimed Fifth Third unfairly targeted consumers with financial penalties for faulty checks they had no hand in issuing. The customers also alleged they could not avoid or anticipate a return deposit item fee when the deposits were returned.
In the complaint, the customers claimed they were unlawfully charged return deposit item fees. The customers attempted to deposit checks into their checking accounts. According to the customers, at the time of the deposit, they had no reason to believe that the checks would be returned unpaid. After the checks were returned unpaid, Fifth Third allegedly charged $15 fees. The customers brought three claims: breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violation of the Illinois Consumer Fraud and Deceptive Practices Act. The customers seek restitution, damages with interest, and a declaration that Fifth Third’s fees were unlawful.
Bottom Line: Fifth Third’s answer to the complaint is due June 3, 2024.
Documents: Complaint
