USAA to Pay $64.2 Million to Settle Overcharging Allegations
San Antonio-based USAA in Hot Water over Overcharge Claims
In recent news out of San Antonio, USAA, a financial services giant, has agreed to pay $64.2 million to conclude a class-action lawsuit that accuses it of overbilling service members and veterans. The accusation involves charges on fees and rates as well as purportedly enrolling these individuals in financial products without their consent.
Implications for the Service Members and Veterans Class
About 210,000 members are engaged in the case, and after an approximate year of mediation, the settlement is expected to distribute slightly more than $200 per member, citing documents filed in the North Carolina federal court on Friday. Each of the named plaintiffs in the case is anticipated to receive $20,000.
However, the settlement awaits judicial approval, and officials from USAA are still countering the allegations made in the lawsuit.
USAA spokesperson, Roger Wildermuth, revealed that although they dispute the lawsuit’s claims, they decided it was in their best interest to sidestep “lengthy and expensive litigation”. He further remarked that “before this lawsuit was filed, we had already compensated members for errors that may have occurred related to the allegations in the lawsuit.”
USAA’s Undelivered Checks
If approved, this settlement would put to rest a legal spat that has spanned three years, further accusing USAA of not making sufficient efforts to ensure customers actually received their reimbursement checks.
In 2021, USAA made an attempt to compensate members for the alleged overcharging by mailing out about 859,000 checks. Many of these checks, however, were never cashed. An amended petition filed by plaintiffs alleges that this was due to the checks being delivered in nondescript envelopes, leading many service members to disregard them as junk mail or solicitations.
USAA defended this action, with their spokesman, Wildermuth, stating that “Roughly half of the announced settlement amount is simply reissuing checks we had previously mailed that our members never cashed.”
The Future for USAA
As a company primarily serving U.S military members and their families, this settlement represents a significant financial hit for USAA.
While the lawsuit is set to be concluded subject to the approval of the settlement, the occurrence brings to light the scrutiny financial institutions face in charging fees and rates, especially those serving specific and protected demographics like veterans and service members.
Should the settlement be approved, this would be the closure of a corporate saga for USAA, hopefully leading to tighter administrations and improved relations with their customer base, while serving as a cautionary tale for other institutions regarding transparent financial operations.
Reporting from San Antonio, it remains to be seen the long-term impact of this lawsuit on the reputation of the financial giant and the reaction of the public and service members towards USAA. This case underlines the importance and the potential ramifications of financial institutions maintaining transparent, fair and legal operations, particularly when veterans and service members are concerned–a demographic that has long been respected and protected within the nation.
