Bank Sued for Uber and Lyft Overdraft Fees

A proposed class-action lawsuit was filed in New Jersey federal court, alleging that a national bank improperly categorized Uber and Lyft ride-sharing services charges as “reoccurring” in order to increase overdraft fees.

In Britney Lawrence v. TD Bank N.A., the named plaintiff asserts that her account deposit agreement promises that non-recurring debit card transactions will not be approved if they would lower the account balance past zero.  Thus, under the terms of the alleged agreement, a non-recurring debit card transaction could not trigger overdraft fees.  On the other hand, the agreement does allow “reoccurring” debit card transactions to be overdrafted.  Reoccurring charges would include such things as monthly utility bills, cable bills, or mortgage payments.

The class action complaint alleges that when “customers use their debit card to pay for rides with Uber or Lyft – rides that are by their very nature one-time transactions and non-recurring–” the bank approves the transaction, even if the charge results in overdrawing the account.  In the case of the named plaintiff, two one-time payments to Uber were paid, in amounts of $7.52 and $8.21, despite the plaintiff not having a high enough account balance to cover the charges.  As a result, the plaintiff’s account went into overdraft, and the bank allegedly charged two $35.00 overdraft fees for the transactions. The complaint goes to claim that the bank “should know that people transacting for a one-time ride are making a one time purchase,” and also attaches a screenshot from Uber’s website (taken in May of 2016) that states, “the recurring note on your statement is your bank’s interpretation that you card is on file with our payment processor.”

The lawsuit was filed on December 5, 2017.  The defendant bank has still not responded, and it remains to be seen whether the court will allow the case to proceed as a class action. The complaint is available here.