Every day, residents in Michigan and elsewhere make business transactions with large banks. When making transactions, such as debit card purchases, consumers trust these institutions to use fair practices. When these practices seem unfair or excessive, banks may find themselves involved in business litigation. Recently, an appeals court vacated a restitution order against one of the largest banks in America.
The appeals court overturned a restitution award and permanent injunction ordered by a lower court for Wells Fargo's policy on overdraft fees. The business litigation began with consumers suing Wells Fargo for listing debit card transactions from high-to-low, which consumers claimed violated unfair competition law. A lower court found that Wells Fargo's practice of listing the transactions in such a way resulted in excessive overdraft fees and ordered Wells Fargo to pay a restitution award of over $200 million.
The court also ordered a permanent injunction against Wells Fargo's use of the high-to-low method. But the appeals court found the lower court's restitution and injunction order was preempted. The court remanded the case to the lower court to determine an amount of relief for the Wells Fargo's violation of a state law, which bans fraudulent misrepresentations to consumers.
In many states, unfair competition includes deceptive misleading advertising and unfair business practices. Business litigation against a large bank like Wells Fargo may be financially and emotionally costly for consumers. Because of these large costs, individuals considering business litigation should be aware of the possible ways to resolve business disputes, such as negotiations outside of the courtroom, as alternatives to business litigation.
There are some cases that may not be resolved through alternatives of business litigation, however. In such cases, consumers and business owners should be aware of rights so that they make and make an informed decision.
Source: Fox Business, "Appeals Court Reverses $203 Million Order Against Wells Fargo," Dec. 26, 2012