The country's 15th largest bank is illegally charging excessive termination fees to discourage its customers from transferring their assets, according to a putative class action lawsuit recently filed by a Beaumont man.
George W. Brown III filed the suit Nov. 23 in Jefferson County District Court against Compass Bank.
Brown claims Compass Bank began charging its excessive fees after its account manager and other trust department personnel left the company to form their own wealth management business, Genesis Wealth Management.
When Brown attempted to transfer his money from Compass Bank to Genesis, Compass threatened to charge him a termination fee of no more than 1 percent -- fees that would result in charges in excess of the $25 asset termination fee Compass promised Brown when he invested with the bank, according to the complaint.
"Compass ultimately charged Plaintiff and the Class members a termination fee in an amount equal to 34 basis points of their account balances, which violated the Hibernia trust department fee schedule as well as the industry standard, and resulted in a termination fee substantially in excess of a $25 per asset termination fee, or the flat fee industry, which is unreasonable for the industry and is unconscionable," the suit states.
By charging the fees, Compass is "utilizing accountholders as litigation pawns to punish Compass' former employees and charging excessive and unearned management fees and account termination fees," the complaint says.
In his complaint, Brown alleges breach of contract, breach of fiduciary duty, breach of the duty of good faith and fair dealing, conversion, violations of the Texas Theft Liability Act and Violations of the Texas Deceptive Trade Practices-Consumer Protection Act against Compass. In addition, he alleges unjust enrichment.
In his complaint, Brown is seeking actual and treble damages, pre- and post-judgment interest at the highest legal rate, injunctive relief, attorneys' fees, costs and other relief the court deems just.
Mitchell A. Toups of Weller, Green, Toups and Terrell in Beaumont and Richard L. Coffman of The Coffman Law Firm in Beaumont will be representing him.
The case has been assigned to Judge Gary Sanderson, 60th District Court.
Case No. B188-855