Stout assisted counsel for credit unions in class action matters. We identified the amounts of potential damages to the class under the plaintiffs’ theories of liability.

In a typical case, a federal credit union was sued by a group of its members over allegations of improperly levied overdraft fees. The claim alleged that the credit union charged overdraft fees in a manner that was in violation of the credit union’s deposit account agreements with its account-holder members. The credit union allegedly charged its members multiple overdraft fees on a single declined transaction in instances where the merchant attempted to process the transaction more than one time (a “multiple presentment” claim).

Additionally, the members claimed that the credit union improperly charged overdraft fees on transactions when, at the time of authorization, the member had a sufficient balance to cover the amount of the transaction, but at the time of settlement of the transaction, the member had an insufficient balance (an “authorize positive settle negative” claim).

Our Role: The defendants engaged Stout to determine the potential damages exposure relating the each of the plaintiffs’ claims for the damages period, often extending as long as seven years. Our team analyzed a sample of customer transaction data from the credit union’s core financial data system to determine the occurrence rate of each theory of damages against the eligible overdraft fees. We also analyzed the credit union’s financial records to quantify the total eligible fee categories and applied the occurrence rate from the analyzed sample to determine the potential damages exposure to the credit union.

Outcome: We quantified the estimated exposure to the credit union, including the amount of eligible overdraft fees and the occurrence rate for each theory of damages put forth by the plaintiffs. This included comparing our methodology and damages estimates to the plaintiffs’ expert’s calculation methodology and identifying the underlying flaws and inaccuracies in the plaintiffs’ damages claim.