In Miami recently, Senior U.S. District Judge James Lawrence King approved a $410 million lawsuit settlement for a class action lawsuit brought against Bank of America. The suit made the claim that Bank of America deliberately processed the debit card transactions made by consumers in such a way as to maximize overdraft fees, by processing an individual`s transactions in order of highest dollar amount to lowest. When a debit card transaction is processed against an account that lacks sufficient funds to cover it, an “overdraft” results. At most financial institutions, account overdrafts generally incur a fee. In the case of Bank of America, the fees typically amounted to a $35 charge for each occurrence.
According to the settlement, the 13.2 million BOA customers who used debit cards between the dates of January 2001 and May 2011 will receive some portion of the $410 million, although the payout amount many will be eligible for will be a tiny fraction of the amount they were charged. Considering that the average customer paid $300 in overdraft charges, the award they can expect to receive from the lawsuit would be around $27. No action need be taken on the part of consumers nor do they need to fill out any paperwork in order to receive their share of the settlement. Anyone who still holds an account at Bank of America will notice an automatic credit once the moneys have been dispersed and those who no longer do business with the bank will have a check sent to them via the USPS.
There have been very similar class action lawsuits filed against some 30 other banks all across the country.
Even after the settlement Bank of America has continued to defend their position that they did nothing wrong in processing the debit transactions in a highest-to-lowest sequence.
According to The LA Times, spokeswoman for Bank of America Anne Pace commented on the settlement yesterday via a telephone interview.
“We`re pleased to have reached a fair resolution in this matter,” Pace said.