Bank of America to settle $410M overdraft suit
Published: May 24, 2011
Time posted: 1:44 pm
Tags: Bank of America, Citibank, James Lawrence King, JPMorgan Chase, U.S. Bank, Wells Fargo
Bank of America has tentatively agreed to a $410 million overdraft fee lawsuit settlement, according to court documents released Monday.
The lawsuit was filed as a class action against some U.S. banks, but the Charlotte-based banking titan is the first to agree to the settlement. Florida District Court Judge James Lawrence King scheduled final approval for Nov. 7.
The suit alleges that BofA and more than 30 other defendants — including JPMorgan Chase, Wells Fargo, U.S. Bank and Citibank — overcharged customers for overdraft fees on purchases made with their debit cards.
Not only were complaints about the high overdraft fees, but customers also said the banks did not apply purchases in chronological order. For example, if a customer had $50 in their account and bought a hamburger for $1, a tank of gasoline for $35 and then a meal for $55, the $55 would be drafted first, leading to three overdraft fees charged instead of one.
Bank of America no longer charges overdraft fees but is contemplating bringing them back with a text messaging service to allow customers to approve or decline purchases.
Scott Baughman can be reached at email@example.com.