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UPDATE:
- The Court dismissed this case with prejudice on Dec. 18, 2019.
Bank of America NA has been hit with a class action lawsuit accusing it of imposing fees and other barriers for consumers seeking to discontinue recurring electronic funds transfers from their checking accounts.
“For consumers who authorize recurring electronic funds transfers (‘EFTs’) from their checking accounts–for anything from gym memberships to loan payments–federal law provides a very important right: upon notice to his bank that a consumer no longer authorizes the recurring debits, his bank is obligated to immediately cease such debits,” the Bank of America class action lawsuit says.
Plaintiff James Foreman claims BofA imposes hurdles on its customers who seek to end their EFTs from checking accounts, such as imposing hefty fees before the right to discontinue the recurring fund transfers.
“This federally provided right to end recurring EFTs is especially important for consumers who unwittingly fall into predatory and illegal internet payday loans,” Foreman alleges in the BofA class action lawsuit.
Foreman specifically points to payday loans and high-cost installment loans, which allegedly “trap consumers into debt they cannot afford.”
According to the BofA class action lawsuit, lenders of these so-called “payday debt traps” require consumers to provide their bank account information and to provide authorization to debit future payments from the account.
The Bank of America class action lawsuit points to California laws that restrict payday loans. Under California law, only lenders who are licensed by the Department of Corporations and who abide by the interest and fee limits may make payday loans. Further, California law caps the amount of the loans and the amount of fees the payday lender can charge.
Foreman alleges that certain payday lenders use the internet to circumvent California law and offer payday loans to California residents, which may feature interest rates as high as 500 percent or higher.
The federal Electronic Funds Transfer Act also reportedly provides consumers with the right to discontinue authorization for recurring EFTs of loan payments.
However, Bank of America allegedly charges its account holders a fee of $30 to terminate their authorization of recurring EFTs. The BofA class action lawsuit refers to these fees as “Stop Payment Fees,” or SPFs.
Foreman claims he was a victim of a predatory lending scheme, and notified Bank of America that the lenders were no longer authorized to withdraw funds from his account. According to the BofA class action lawsuit, Bank of America informed Foreman that it would only stop the payments if he paid a $30 Stop Payment Fee for each allegedly illegal loan.
“Plaintiff had no choice but to pay this fee if he was to escape from the illegal debt trap in which he found himself,” the BofA class action lawsuit says.
The Bank of America class action lawsuit was filed on behalf of Foreman and a proposed Class of all BofA checking account holders who incurred at least one stop payment fee to discontinue recurring electronic funds transfers. Foreman also seeks to represent a subclass of Class Members who hold Bank of America checking accounts in California.
Foreman is represented by Jeffrey D. Kaliel and Sophia G. Gold of Kaliel PLLC.
The Bank of America Stop Payment Fees Class Action Lawsuit is James Foreman v. Bank of America NA, Case No. 5:18-cv-01375-NC, in the U.S. District Court for the Northern District of California, San Jose Division.
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15 thoughts onBank of America Class Action Challenges Stop Payment Fees
Thieves. Should be a criminal case. Yes. It happened to me once at BOA. An online company had charged me triple for a purchase on my debit card. They told me it would be 60 days before reimbursing me so I decided to stop payment and was charged $30 fee. The triple charge would have cost me a $39 overdraft penalty. Slamned if you do; skamned if you don’t.
They did this to me for yrs, please add me to the list
Add me to the list
The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!
I deposited over 260 dollars and they still charged bank fees. They have a fee for everything. Now I have to pay them for trick accounting. Damn.
My bank still does this it’s not Bank of America though. I’m terrified of putting anything on EFT because if one day I’m in a bad position financially I’ll have to pay overdraft fees and late fees for whatever bill. Its just the banks purposely helping rack up fees so you can owe them more. I wanted to ask about this.
Add me too
I need to be added as well they say i owe them over 2500 because i said get them out of my account and they refused. Didnt even offer the 30 stop fee. I told them to close my account conpletely and they left it open for more charges to occur.
Definitely add me to the list it’s insane how they do penalties for nothin
The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. We recommend you sign up for a free account at TopClassActions.com and follow the case. We will update the article with any major case developments or settlement news! Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!
Definitely add me to this one thank you finally their getting their day.
Add me to list