Prepaid Visa Card Class Action Lawsuit Settlement Reached

A proposed $17 million settlement has been reached in the prepaid visa card class action lawsuit arguing whether or not the “Vanilla Prepaid Visa Cards” are subject to fees.

The prepaid visa card class action lawsuit was launched on May 26, 2014 and accused Peoples Trust of violating the Ontario Consumer Protection Act by illicitly drawing out fees from the prepaid visa cards. The lead plaintiff, Joyce Bernstein, sought damages against Peoples Trust Company and Peoples Card Services LLP.

The damages sought were due to the expiry dates on the prepaid cards not being accurate. Joyce received a Vanilla Prepaid Visa in September 2010 that featured an expiration date of April 2014. However the prepaid visa card class action lawsuit claims that in 2013 the amount on the prepaid card was annexed by Peoples Trust. She claims she never used the prepaid visa card before all the money on the card was seized.

On Jan. 31, 2017, the prepaid visa card class action lawsuit Canada was certified in The Ontario Superior Court of Justice. Shortly after, in March 2017, Ontario cardholders who had purchased prepaid cards from People Trust Company were allowed to join the action. The lawsuit called for “all consumers in Ontario within the meaning of the Consumer Protection Act, 2002, who purchased or acquired a prepaid payment card sold or issued by Peoples Trust between November 29, 2011, and April 30, 2014.”

Honourable Justice Perell of The Ontario Superior Court granted a judgment in the case on May 13, 2019, ruling in favour of the plaintiff. The prepaid visa cards were categorized as gift cards under the Consumer Protection Act. Peoples Trust was found to be illegally taking so-called “expired” funds and other miscellaneous fees from the prepaid cards. 

The court alleged that Peoples Trust had unlawfully taken $15,330,000 in charges and “expired” card amounts. Peoples Trust was ordered to pay $1.5 million worth of punitive damages to the plaintiffs. The actions of Peoples Trust were deemed as deliberate breaches of the law, negligent, and careless. 

However, the Court did not find that other types of cards were subject to the same actions. Other reloadable cards were not a part of the damages awarded in this case, because they were not found to be categorized as “gift cards” under the Consumer Protection Act. The action did not apply to reloadable cards. 

Exercising their right to do so, Peoples Trust and Peoples Card Services LLP appealed the Ontario Superior Court’s ruling that the prepaid cards were considered gift cards under the Consumer Protection Act, and therefore not allowed to have funds and fees taken from them. 

Soon after, Joyce cross-appealed, insisting that the Vanilla Prepaid Visas by Peoples Trust and the other cards should be categorized as gift cards under the Consumer Protection Act.

On July 15, 2020, it was announced that both parties in the prepaid cards class action lawsuit filed a settlement agreement. The class action settlement Canada is at the mercy of Court approval, but it grants a comprehensive payment to the plaintiffs in the amount of $17,000,000. In May 2019, the original amounts sought were $15,300,000 in compensatory damages, and $1,500,000 in punitive damages, plus millions pre and post-judgment interest costs. The $17,000,000 awarded to the class members includes $6,186,000 for prepaid card balances after the expiration dates.

The settlement is a compromise for both parties in the prepaid card class action lawsuit. The defendant and plaintiffs agree that appeals will be dismissed, but in an exception, the Court of Appeals may nullify the ruling on punitive damages. 

The prepaid card class action lawsuit reaching a settlement does not point to liability for Peoples Trust. There is no admission of liability for the defendants, meaning that Peoples Trust has not been interpreted as wrongdoers in the eyes of the law. 

The hearing for settlement approval for the prepaid visa card class action lawsuit will be held via video conference and is scheduled for Sept. 25, 2020.

The prepaid card class action lawsuit states that the parties should do their best to achieve a settlement agreement by Sept. 30, 2020, at the latest, and a disposition of the appeal by Oct. 31, 2020.

According to the lawyers for the class members, if it is approved, “the settlement will provide further benefit to the Class by allowing for claims by both SLP and GPR cardholders and by removing the delay of the appeal and any leave application that would follow.”

Top Class Actions will post updates to the prepaid visa card settlement including open settlement information and claim filing instructions once they become available. Click on the “Follow Article” at the top of this page to get the latest updates about the prepaid cards class action settlement by using your free Top Class Actions account. For the latest updates, keep checking ca.TopClassActions.com or sign up for our free newsletter.

Have you ever had a prepaid visa card? Were you charged fees? Was money ever seized from your card before its listed expiration date? Tell us your story in the comment section below! 

The plaintiff is represented by Louis Sokolov and Jonathan Schachter of Sotos LLP and Steven Barrett, Charles Sinclair, and Nadine Blum of Goldblatt Partners LLP.

The Prepaid Card Class Action Lawsuit is Joyce Berstein v. Peoples Trust Company, et al., Case No. CV-13-493837CP, in the Ontario Superior Court of Justice, Canada.

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