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A U.S. judge on Wednesday rejected a request by Toronto-Dominion Bank to dismiss a class-action lawsuit brought in December by credit card customers who alleged the lender did not adhere to the terms of their agreement.

Customers who obtained TD credit cards secured by a frozen deposit between 2016 and 2019 were told that if they did not default on payments for seven months, they may be eligible to automatically “graduate” to an unsecured credit card.

This did not happen, according to documents filed with the United States District Court in New Jersey.

The plaintiffs, who are seeking damages of at least $6.3-million from the Canadian bank, allege that, despite maintaining their cards without defaulting for between about 15 and 37 months, they were not given unsecured credit cards, according to court documents.

“The allegations regarding the timing of automatic review adequately support Plaintiffs’ claims at this stage,” Judge Renee Bumb wrote in her opinion.

“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.”

A TD spokesperson did not immediately respond to a request for comment.

TD in May agreed to pay US$41.5-million to settle a separate U.S. class action lawsuit for charging excess insufficient funds fees on customer accounts.

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