Amidst debate over how much banks value clients, one among them stands accused of purposefully profiting off the math errors of its own customers.
A new class action lawsuit against RBS Citizens alleges the bank has made millions off of customers that deposited more cash than they wrote down on their deposit slips, according to Courthouse News. The case, led by chiropractic office Todd Bowers Inc., says that instead of returning the extra money to customers, RBS Citizens siphoned it off to a non-customer account used for its own purposes.
"Citizens Bank developed a policy and employs a practice whereby customer funds are being diverted daily for the benefit and use by Citizens Bank without the knowledge, consent or approval of the customer,” the lawsuit alleges, according to Courthouse News.
Citizens Bank told The Huffington Post in an email that the bank is "reviewing the complaint and looking into this customer's concerns."
This isn’t the first time banks have been accused of taking advantage of erroneous customer arithmetic. In 2009, Wells Fargo customers filed a class action lawsuit against the bank alleging similar practices. That lawsuit even alleged Wells Fargo even had a name for the practice called the "Excess Funds Retention Policy."
Banks have repeatedly been accused of exploiting their customers by charging them exorbitant fees when they overdraw their accounts, the Birmingham News reports. That trouble is compounded by more than a third of account holders not being familiar with their bank’s overdraft policies. Citizens Bank agreed to pay $137.5 million last month to settle accusations that it unfairly charged customers overdraft fees.
JPMorgan Chase and Bank of America have also agreed to pay hundreds of millions of dollars to settle overdraft fee abuse allegations. The Consumer Financial Protection Bureau additionally announced in April that it was launching a new investigation into overdraft fees at nine major banks, BusinessWeek reports.
Banks have been additionally accused of systematically exploiting customers through predatory mortgage practices. Countrywide Financial, once the nation's largest mortgage lender, has been accused of duping Americans into loans they couldn't afford then charging them huge fees when payment obligations weren't met. Officials have also accused banks of failing to verify potential homeowners' documents. As a result, millions of Americans have been affected.
Banks make number errors too, however. In January, a man in India notified his bank after finding his balance had swelled to $9.8 billion, the BBC reports. Not everyone is so polite. A couple in New Zealand withdrew $2.3 million and ran for it after a bank mistakenly credited $6.2 million to their account, AOL Daily Finance reports.