Judge: TD Bank can face breach-of-contract claim over ATM fees

Judge: TD Bank can face breach-of-contract claim over ATM fees

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CAMDEN – TD Bank has lost a round in a court fight over its ATM fees.

A federal judge last week declined to dismiss a class-action lawsuit that claims TD has overcharged its customers who use ATMs outside the bank’s network.

The suit challenges a TD policy of charging two fees of $3 each when customers check their account’s balance while withdrawing money from an out-of-network ATM.

It estimates improper fees could exceed $500 million.

In a ruling Thursday, U.S. District Judge Robert Kugler said the lawsuit made “persuasive” arguments that the language in TD’s contract with ATM users is ambiguous.

That allowed the suit’s breach-of-contract claim to survive TD’s motion for dismissal.

Attorneys for TD customers assert the wording allows the bank to charge only a single $3 charge for each out-of-network withdrawal, Kugler’s ruling said.

In contrast, the Camden judge noted, TD asserts its account agreements and fee schedule “explicitly authorize and conspicuously disclose” the multiple charges.

The dispute “can be boiled down to disagreement over how the word ‘each’ is interpreted in the fee schedule,” said Kugler.

In TD’s view, “each” indicates a fee applies to “every one of” a customer’s transactions on an out-of-network ATM, the ruling said.

The lawsuit, however, asserts the contract “promises that TD Bank will assess a single (out-of-network) fee … even if an accountholder conducts multiple functions while using an ATM.”

The suit also argues a balance inquiry, “especially one undertaken in conjunction with a cash withdrawal, is not reasonably understood as a stand-alone, fee-worthy event.”

And it notes TD, prior to amending its fee schedule last year, “never disclosed it could or would assess $6 or more on a single, 30-second ATM cash withdrawals.” (sic) 

Customers typically pay a third, separate fee of $3 to the operator of the out-of-network AT

Attorneys for TD and the proposed class of bank customers did not respond to requests for comment.

The suit was filed in the names of two New York women who objected to being charged for balance inquiries during transactions in 2014 and 2016. It seeks to represent all TD customers who received two charges from the Cherry Hill-based bank for an out-of-network ATM withdrawal.

TD, which has more than 1,100 offices along the East Coast, does not charge its customers for transactions on the bank’s ATMs.

Jim Walsh covers public safety, economic development and other beats for the Courier-Post, Burlington County Times and The Daily Journal.

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