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Bank of America to Settle Excessive Fees Class Action for $66.6 Million

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Los Angeles, CAYet another major bank has bowed to litigants enraged over excessive bank overdraft fees, following the announcement of a settlement worth $66.6 million. The bank overdraft fees settlement, designed to end a lawsuit against Bank of America, still requires court approval.

According to Reuters (11/02/17) plaintiffs asserted that some of the banking overdraft fees charged by Bank of America were not connected to any real service in exchange for the fees, and thus translated to an interest charge that violated the National Bank Act.

The bank overdraft fees lawsuit was filed in 2016. Lead plaintiff Joanne Farrell from California, alleged in the excessive overdraft fees class action that the defendant charged $35 when an account is first overdrawn, then another $35 if the account remains in overdrawn status for five days. Farrell’s lawsuit noted that the initial fee was charged for honoring a check when the account holder had insufficient funds in the account. However, the second fee was not tied to any particular service and – as such – the fee was in reality an interest charge for continued use of the bank’s funds.

In Farrell’s case, her negative balance ranged from $3.59 to $284.86 across the five days represented by the second $35 overdraft fee.

Viewed as annualized interest, the fee would translate to an interest rate ranging from 897 percent to 71,170 percent, according to the excessive bank fees lawsuit.

Plaintiffs asserted that such a range in interest rates violated guidance as outlined in the National Bank Act, which generally restricts interest rates for banks to the legal limit where the bank is based, or eight percent in Bank of America’s home state of North Carolina.

According to Reuters, there are upwards of six million customers of the Bank of America who will benefit from compensation derived from the settlement. Those customers, who hail from across the nation, paid overdraft fees reaching back to February of 2014. As part of the settlement, the defendant also agreed to stop charging for extended account overdrafts for a period of five years. The hiatus in fees is estimated to save plaintiffs about $1.2 billion over the five-year term.

The excessive bank overdraft fees lawsuit is Farrell et al v. Bank of America, Case No. 16-492, in the US District Court, Southern District of California. The settlement was disclosed in a court filing on October 31.

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READER COMMENTS

Posted by

on
I had a Bank of America checking account back in 2010 is it a little for this lawsuit I had many fees accrued including the late fee for not putting in a deposit within 5 days

Posted by

on
Yeah check US bank they do the same thing. We had to quit useing that bank because not only do you get hit with excessive OD fees. But they deposited someone elses money in my account and charged me for it. BRAVO! thank you Attnys. for sticking up for us!

Posted by

on
bof a continuously stole money in the form of illegal fees

Posted by

on
Bank of America Late Fee's

This has been happening to me quite a bit for the last ten years. Bank of America will move my deposits or debits, so I will be overdrawn and charge me late fee's, when, if they were added and deducted like they should have been, the account would not have been overdrawn. Then, if you don't make a deposit right away, they charge another late fee. A couple of time, I was charged a late fee 3 times, before my deposit was posted. Another problem I have is BOA holding deposits at least 24 hrs and allowing only a small part of a deposit to be post, until the check clears, even though they know the check is good. trhey do this when the check is large. They did that with a check I had from Northwestern Mutual.

Posted by

on
Same thing here.. 2 $35 overdraft fees. Even if the item is returned they don’t reverse the fee. I often have my account over drafted by only the amount of fee. Then they charge a $35 fee after 5 days of their overdraft fee still being negative. Upu can be -$1 and they will charge $35. It’s ridiculous

Posted by

on
I have a lot of over draft fees

Posted by

on
this has happened to us countless times...and more than one overdraft fee...it is crazy what they charge. dating back to 2005 where is was really crazy!
Been with Bank of America since then but often wondered why?
They would not apply credit card payments properly then charged late fees and overdraft fees if they didn't deposit the check for 7 days. We didn't know that they would deposit the check we took but funds not available for 7 days...for years we were depositing the same checks...finally I went with to find out why the overdrafts and that is what they said was funds not available for 7 days...but we could go inside and cash it and then deposit the cash for immediate funds...
That makes no sense we could go inside and cash the check and get immediate funds? But if we deposited the check the funds wouldn't be available for 7 days and incurring fees...?

Posted by

on
Bank of America used high overdraft to my account I used to have with them.

Posted by

on
I held a BOA credit card from 2005-2011. During the last year I was overcharged fees on at least 3 occasions. I eventually paid full balance & closed the account.

Posted by

on
They did this to me all the time all the way up to the time I stopped banking with them. Over the course of several years racked up hundreds in fees, and they would post checks debits first then the deposit where they could collect more fees then keep the account in an overdraft state.

Posted by

on
They are still ripping off people it just happened to me again from BofA

Posted by

on
I totally agree that Bank of America deliberately steals money from their clients in the form of excessive fees. The interesting thing is that one (not even the US Government) make them accountable for their dishonesty to consumers.

CHASE Bank, is another entity who steals money from their customers in the form of excessive fees & $10 for the use of the Bank ATM machines.

This abuses needs to be stopped.

Posted by

on
So bank of america will pay back ALL the illegal fees they stole?

Best one, back during the housing crisis when the banks were passing mortgages back and forth they lost unbroken chain of ownership and sent a letter to a friend saying such. boa wells Fargo and another bank all tried collecting the mortgage money monthly. The one that kept up the longest fabricated paperwork to claim they had the right to the money. They provided a document with Dean hackemers name on it with his title. Worst part was he hadn't attained that position until 5 years after the 'signing

Posted by

on
this happened to us...many times Bank of America still does it to us. For the past 2 and a half years I have been waiting for my social security disability to come through. We are having a hard time keeping the house and buying food and medicine. As a result we are getting late fees (35.00 x 2).

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