Bank of America to Pay $410 Million for Overdraft Practices
Remember transaction sorting? Banks preventing consumers from opting out of overdraft protection? Thought the new consumer protection laws had outlawed these practices and made them obsolete? Sure theyre obsolete and illegal NOW, but banks still have to make reparations for the past. Earlier this year, Bank of America agreed to pay $410 million to settle sprawling litigation stemming from allegations that consumers were charged unlawful overdraft fees. The class action lawsuit, which names more than 30 banks, alleges:
- Imposed overdrafts and overdraft fees when, but for reordering transactions, there would otherwise be sufficient funds in the account.
- Failed to provide customers with accurate balance information.
- Delayed posting of transactions by customers using debit cards so that customers are charged overdraft fees on transactions, even though the customers had sufficient funds in their accounts to cover the transactions upon execution.
- Did not alert its customers that a debit card transaction will trigger an overdraft fee, and does not provide its customers with an opportunity to cancel such transactions.
- Did not clearly disclose and/or refused to allow its customers to opt out of its overdraft protection program.
What Do You Need to Do to Join the Class Action Lawsuit Against Bank of America? For this particular class action, youll get a notice in the mail if youre a class member, which is anyone who had a Bank of America debit card between Jan 2001 and May 24, 2011, and youll automatically get a payment or credit. For more info, there has been a website set up to answer consumer questions: http://www.bofaoverdraftsettlement.com.
Other Banks Named in the Lawsuit This suit was result of several suits filed in Florida in 2009 which were combined into one case re Checking Account Overdraft Litig., No. 09-MD-02036-JLK. The suit has more than 30 defendant including JPMorgan Chase, Wells Fargo, U.S. Bank and Citibank. These banks are expected to settle in the coming months.
This is not Wells Fargos first time at the overdraft settlement rodeo. In 2010, Wells Fargo was ordered to pay 203 million for the manipulation of overdraft fees.
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