TORONTO (Reuters) - A U.S. judge on Wednesday rejected a request by Toronto-Dominion Bank to dismiss a proposed class action brought in December by customers who said it had failed to honor its agreement to give them regular credit cards.
Customers who obtained credit cards secured by deposits between 2016 and 2019 accused TD of reneging on its promise to let them automatically "graduate" to unsecured cards if they avoided defaulting on payments for seven months.
U.S. District Judge Renee Bumb said the timing of TD's review process for the upgrades supported letting the case continue.
"Assuming, as the court must, the veracity of plaintiffs’ allegations, defendant engaged in wrongful conduct when it promised plaintiffs that their accounts would be automatically reviewed for graduation after seven months, only to not actually do so for two years," the Camden, New Jersey-based judge wrote.
TD said it cannot comment on pending litigation.
The plaintiffs are seeking damages of at least $5 million (C$6.3 million) from the Canadian bank, claiming that it refused to give them unsecured credit cards even after they had gone between 15 and 37 months without defaulting.
The plaintiffs are seeking to pursue a nationwide class action, as well as smaller class actions for customers in New Jersey, New York and Connecticut. TD Bank has U.S. offices in Cherry Hill, New Jersey, a suburb of Philadelphia.
TD shares closed down 0.3% at C$85.65 in Toronto, in line with the broader stock benchmark.
TD in May agreed to pay $41.5 million to settle a separate U.S. class action lawsuit for charging excess insufficient funds fees on customer accounts.
(1 Canadian dollar = $0.7915)