Daily Banking News
$42.39
-0.38%
$164.24
-0.07%
$60.78
+0.07%
$32.38
+1.31%
$260.02
+0.21%
$372.02
+0.18%
$78.71
-0.06%
$103.99
-0.51%
$76.53
+1.19%
$2.81
-0.71%
$20.46
+0.34%
$72.10
+0.28%
$67.30
+0.42%

Bank of America reaches $75 mln settlement over excessive fees


A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. REUTERS/Carlo Allegri/File Photo

Bank of America Corp (BAC.N) agreed to pay $75 million to settle a lawsuit accusing the second-largest U.S. bank of extracting overdraft fees it didn’t earn from customers with savings and checking accounts, court papers showed.

A preliminary settlement of the proposed class action was filed on Wednesday with the federal court in Charlotte, North Carolina, where the bank is based, and requires a judge’s approval.

Customers said Bank of America often charged multiple $35 fees for insufficient funds or overdrafts on a single transaction, sometimes reflecting the bank’s repeated attempts to process it at a merchant’s request.

One woman said the bank charged her $105 after rejecting her $20 credit card payment and then attempting without her knowledge to “retry” processing the same payment five and nine days after the initial rejection, resulting in three $35 fees.

One woman said the bank imposed $105 in fees after rejecting her $20 credit card payment, attempting without her knowledge to “retry” processing the same payment five and nine days after the initial rejection, resulting in three $35 fees.

The plaintiffs’ lawyers said that as part of the settlement, Bank of America will stop imposing multiple fees on “retry” payments for at least five years, saving customers an estimated $5.3 million a month and $318 million overall.

Bank of America denied wrongdoing in agreeing to settle. A spokesman declined to comment on Friday.

The plaintiffs’ lawyers intend to seek up to $25 million from the settlement fund in attorney’s fees.

Repeated overdrafts can result in account closures and leave some lower-income customers without access to banking services.

Banks have faced many lawsuits over the years claiming they sought to illegally maximize overdraft fees.

U.S. banks took in $11.68 billion of overdraft fees in 2019, according to the Center for Responsible Lending, even before the COVID-19 pandemic left millions in financial distress. Just 9% of account holders paid 84% of the fees, the nonprofit said.

The case is Morris et al v. Bank of America NA, U.S. District Court, Western District of North Carolina, No. 18-00157.

Our Standards: The Thomson Reuters Trust Principles.



Read More: Bank of America reaches $75 mln settlement over excessive fees

Get real time updates directly on you device, subscribe now.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.