In most jurisdictions, the grounds for a bank class action lawsuit are several: a bank must have committed some alleged bad act, either against its customers or its employees; that act must have similarly affected numerous people; and individual lawsuits must usually be somehow undesirable, either because of how many there would be or because of the relatively low amount of individual damages at stake. Most bank class action lawsuits center on fees that a bank uniformly charged its customers. Bank fraud and unfair employment practices can also be grounds for class action bank litigation.
Class actions originated in U.S. courts as a way to join a large number of similarly situated parties into but one lawsuit against a common defendant. Many other countries have since begun adopting the class action model, as well. Each country that permits class actions has its own laws and regulations setting out the grounds upon which class action litigation can proceed. Bank class action lawsuits are no exception. Although there are some differences from country to country, most legal schemes follow the general pattern set out under U.S. law.
In the United States, a class action claim can only be brought if four key requirements are met. First, the proposed class must be so numerous that expecting each plaintiff to file his or her own lawsuit would be impractical. Second, each of the proposed class members must be prepared to litigate exactly the same claim stemming from the same damages. Third, the people filing the lawsuit at the outset must be representative of the class as a whole. Finally, there must be evidence that those representatives will be able to adequately present the claims of the class in court.
A class action lawsuit specific to a bank means a couple of things. The bank must have done something that allegedly harmed a lot of people, for starters. Also, it must have harmed those people in the same way. Most of the time, a bank class action lawsuit focuses on small harms to multiple people over time: things like overdraft fees, teller fees, and interest rate reductions are common targets. Discriminatory employment practices or fraud in payroll reporting can also lead to grounds for a bank class action lawsuit.
These kinds of bank lawsuits are often a vehicle for litigating claims that, independently, involve relatively small damages. The total cost incurred by a customer who has been overcharged in fees, while significant, may not be so high as to justify a lawsuit. Mounting a bank lawsuit can be expensive, and generally takes a lot of time. For this reason, people with relatively small claims often elect not to file a bank suit. If there are enough people with similar damages, however, the aggregate damages could be huge, and might together be grounds for a bank class action lawsuit that any affected party can join.