TD Bank.

TD Bank has agreed to a $7.5 million settlement of suits claiming that its Penny Arcade coin-counting machines shortchanged depositors.

U.S. District Judge Jerome Simandle of the District of New Jersey gave final approval to the settlement on Jan. 11. It also provides an additional $1.9 million in legal fees and costs. He granted preliminary approval in July 2017. The settlement resolves eight suits filed in New Jersey, New York and Florida after NBC's “The Today Show” reported in April 2016 that TD Bank's coin-counting machines undercounted coins by as much as 14 percent.

TD Bank suspended its Penny Arcade program after the media reports of undercounting in April 16, 2016. A month later, the bank said it was retiring all 1,000 coin-counting machines in its branches after finding it was unable to work out the bugs that caused them to undercount customers' coins.

The settlement provides a minimum recovery to the class of 0.26 percent, or 26 cents per $100 exchanged at the Penny Arcade during the class period, which runs from April 11, 2010, to July 12, 2017. That rate “exceeds the net undercount in TD Bank's tests and in plaintiff's tests,” the plaintiffs said in court papers.

Any funds remaining from the $7.5 million after class members are paid will go to a nonprofit organization focusing on financial literacy, which will be agreed upon by the parties.

TD Bank and the plaintiffs separately commissioned tests of representative samples of the company's machines to measure their accuracy. The TD consultants, from Deloitte Transactions and Business Analytics, found two groups of machines had undercount rates of 0.09 percent and 0.11 percent, and the plaintiffs' consultants obtained results that were not appreciably different from the Deloitte readings, according to court documents.

More than 5 million class members have been identified and sent notice of the settlement. TD Bank account holders, who make up 80 percent of class members, were easily identified through company records, the plaintiffs state in a motion for final approval. Non-account holders, who represent 20 percent of Penny Arcade users, will have to submit dates, amounts and supporting documentation to assert claims, and those without supporting documents would be limited to a payout of $1.30, the plaintiffs said in their motion for final approval.

The settlement also provides service awards of $5,000 each to the 13 named plaintiffs, most of whom had losses of less than $100 each.

TD Bank also agrees in the settlement not to resume using the Penny Arcade machines that are the focus of the litigation to provide self-service coin counting in its branches, although the bank is not precluded from providing coin-counting services by other means.

The settlement was reached in mediation with former U.S. Magistrate Judge Joel Rosen, who is now with Montgomery McCracken Walker & Rhoads in Cherry Hill.

Bruce Nagel of Nagel Rice in Roseland, who was co-lead counsel for the plaintiffs, said he was pleased with the outcome but otherwise declined to discuss the case. Other counsel for plaintiffs and the class did not return calls.

David Lesser of Wilmer Cutler Pickering Hale and Dorr in New York and William Tambussi of Brown & Connery in Westmont, who represented TD Bank, did not return calls. TD Bank spokesman Matthew Doherty, when asked about the settlement, said his company has a policy not to comment on litigation.