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$16 Million Settlement in Multiple NSF Fees Class Action

Outcome: $16,000,000 Settlement

Ruby Lambert v. Navy Federal Credit Union, Case No.: 1:19-cv-00103-LO-MSN in the United States District Court for the Eastern District of Virginia

In a class action lawsuit, plaintiffs argued that Navy Federal wrongly charged multiple non-sufficient funds fees (NSF Fees) on a single transaction that merchants represented for payment after initial declination due to insufficient funds. The complaint stated that, per the contract terms, only one NSF Fee should have been levied for each transaction irrespective of the number of presentments. The legal claims included breach of contract, breach of good faith, and violation of the North Carolina Unfair and Deceptive Trade Practices Act.

Case Progression:

Navy Federal’s motion to dismiss was granted by the court, prompting an appeal from the plaintiffs. During the appeals process, both parties engaged in discussion and eventually agreed upon a settlement for the case.

Settlement Outcome:

The settlement reached entails a substantial benefit for the plaintiffs:

  • Monetary Compensation: Navy Federal has agreed to create a $16,000,000.00 common cash fund for compensatory measures pursuant to the settlement terms.
  • Contractual Revisions: To prevent future disputes and clarify the fee-charging process, Navy Federal will amend its Account Agreement and related documents to clearly define the conditions under which Representment NSF Fees are applicable.

This settlement represents a significant victory for the plaintiffs, ensuring both financial compensation and corrective measures to improve transparency and contract clarity. The successful resolution also signals the diligent efforts of the class counsel, Tycko & Zavareei LLP, and underscores the importance of clear contractual terms in financial services.

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