Woman drops overdrafts lawsuit against Fargo bankFARGO, N.D. (AP) — A federal judge on Wednesday approved a request by a North Dakota woman to drop her lawsuit accusing a Fargo-based bank of changing the sequence of checks and charging unfair overdraft fees.
By: DAVE KOLPACK,Associated Press, Associated Press
FARGO, N.D. (AP) — A federal judge on Wednesday approved a request by a North Dakota woman to drop her lawsuit accusing a Fargo-based bank of changing the sequence of checks and charging unfair overdraft fees.
Amber Pieloor, of Underwood, alleged that Gate City Bank changed the debit entries to process the largest ones first, rather than the order that the transactions took place. The bank denied the charges.
Pieloor's attorney, Dan Gustafson, said his client believed she had a strong case but changed her mind after an informal meeting between the two parties.
"We did what we believed to be the responsible thing: We called up the lawyers for Gate City and said, 'We've looked at your stuff, you've answered our questions, and we don't think you do it the way we alleged it,'" Gustafson said.
Gate City's attorney, Todd Zimmerman, did not immediately return a message seeking comment.
Gustafson said the end result of the meeting, which was arranged after a recommendation by U.S. District Judge Daniel Hovland, saved both sides of lot of money because they didn't go through formal evidentiary hearings.
"It was a good way to do it. Everybody sort of did what I would call the professional thing," Gustafson said.
Pieloor's lawsuit, which originally sought class-action status, said Gate City re-sequenced the checks so that the largest charges are paid first in order to deplete the customer's account. Gate City said it uses an online, real-time system were transactions are posted immediately.
"During any particular day, a Gate City customer may have a higher debit charged to their account before a lower debit is charged," Zimmerman said in court documents. "That results simply because the debits were received in the order from a processor, bank or other third party."
The lawsuit is one of several throughout the country alleging that banks are manipulating the order of debits. A federal judge in California has ordered Wells Fargo to pay $203 million back to customers who paid multiple overdraft fees.
Hovland on Wednesday ordered Pieloor's suit dismissed without prejudice, which means she cannot file further legal action in the case.
"The allegations that we had, which we were pretty confident of, just turned out not to be the case," Gustafson. "What looked like re-sequencing was explained in a different way and we were satisfied with the explanation."