Bank of America Corp consented to pay $75 million to settle a lawsuit accusing the second-biggest U.S. bank of charging overdraft fees it didn’t earn from clients with savings and checking accounts, court papers revealed.
A fundamental settlement of the proposed class action was filed on Wednesday with the federal government court in Charlotte, North Carolina, where the bank is based, and requires a judge’s approval.
Customers said Bank of America frequently charged numerous $35 fees for insufficient funds or overdrafts on a single transaction, now and again mirroring the bank’s rehashed endeavors to handle it at a merchant’s request.
One lady said the bank charged her $105 after rejecting her $20 credit card payment and afterward attempting without her insight to “retry” similar payment five and nine days after the first rejection, bringing about three $35 expenses.
One lady said the bank imposed $105 in charges after rejecting her $20 Visa payment, attempting without her approval to “retry” handling similar payment five and nine days after the initial rejection, bringing about three $35 charges.
The offended parties’ legal advisors said that as a feature of the settlement, Bank of America will quit imposing numerous charges on “retry” payments for the next five years, saving clients an expected $5.3 million per month and $318 million generally.
Bank of America denied bad behavior in consenting to settle. A representative declined to remark on Friday.
The offended parties’ legal counselors plan to get up to $25 million from the settlement fees as legal expenses.
Rehashed overdrafts can bring about account terminations and leave some lower-pay clients without access to banking services.
Banks have faced numerous lawsuits over the years claiming they sought to illicitly maximize overdraft charges.
U.S. banks earned $11.68 billion overdraft charges in 2019, as reported by the Centre for responsible lending, even before the Coronavirus pandemic left millions in financial misery. Only 9% of account holders paid 84% of the charges, the charity said.
The case is Morris et al v. Bank of America NA, U.S. District Court, Western Area of North Carolina, No. 18-00157.
