Comerica, Elan OD Protection Unauthorized Enrollment Michigan Class Action

Banks today make sizable revenue from fees related to overdraft (OD) protection. The complaint for this class action alleges that Comerica Bank and Elan Financial Services enroll Michigan customers in OD protection programs without their consent, and then charge these customers significant fees and interest.

The class for this action is all Michigan customers who had checking accounts with CB and credit cards with Elan, who were charged overdraft fees and interest when Comerica and Elan enrolled them in the Overdraft Protection program without their consent, rounding up amounts to the nearest $100 for transfers and overdrawing their checking accounts to pay their Elan credit card.

Comerica has approximately 435 branches in the states of Michigan, Texas, Arizona, California, Florida, and New York. It offers accounts and credit cards issued by Elan. Elan processes transactions and performs other functions for ATM terminals and has a debit and credit card business.

Comerica offers an overdraft protection program to customers with Elan credit cards. Under this program, when customers try a transaction in their checking accounts and they do not have enough money to cover that transaction, Comerica will borrow money on their Elan credit cards to cover the transaction and prevent an overdraft from occurring. 

The complaint alleges, “Overdraft Protection is listed as an option that must be ‘specifically requested’ in the Cardmember Agreement” for the Elan credit card.

In this case, plaintiff Abass El-Hage did not ask for Overdraft Protection, but he was enrolled in it anyway.

Comerica and Elan get significant benefits from the OD protection charges. First, the complaint alleges, they charge the customers fees: an Overdraft Protection Transfer Fee of from $8 to $16 per occurrence, and Overdraft Protection Fee of $10 per occurrence, and interest of 25.7% on each Overdraft Protection Advance. 

Where does the money come from to avoid the overdrafts? It is transferred from the customers’ Elan credit cards. This enables the second benefit: Each Overdraft Protection Advance, the complaint alleges, is rounded up to the nearest $100 increment, even if the overdraft is as little as $1.

But that’s not all. The complaint alleges the companies help themselves to a third benefit: they overdraw customer checking accounts to pay the minimum due on the Elan credit card, even when it was only used to pay for the OD fees and interest on the overdraft protection payments.

Comerica and/or Elan enrolled plaintiff El-Hage in the Overdraft Protection program without his consent. The complaint alleges that, in a one-month period running from December 12, 2017 to January 9, 2018, while he was traveling overseas, the companies transferred $6,000 in Overdraft Protection Advances from his Elan credit card to his Comerica checking account, requiring him to pay the associated nine Overdraft Protection Transfer Fees and the associated extra interest.

The complaint alleges violations of the Michigan Consumer Protection Act and breach of contract, among other things.  

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Comerica, Elan OD Protection Unauthorized Enrollment Michigan Complaint

February 5, 2020

Banks today make sizable revenue from fees related to overdraft (OD) protection. The complaint for this class action alleges that Comerica Bank and Elan Financial Services enroll Michigan customers in OD protection programs without their consent, and then charge these customers significant fees and interest.

comerica_elan_enrollment_in_overdraft_program_compl.pdf

Case Event History

Comerica, Elan OD Protection Unauthorized Enrollment Michigan Complaint

February 5, 2020

Banks today make sizable revenue from fees related to overdraft (OD) protection. The complaint for this class action alleges that Comerica Bank and Elan Financial Services enroll Michigan customers in OD protection programs without their consent, and then charge these customers significant fees and interest.

comerica_elan_enrollment_in_overdraft_program_compl.pdf
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