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The U.S. Court of Appeals for the Ninth Circuit ruled in favor this week of upholding a $66.6 million class action settlement involving Bank of America fees.
In a split decision, the majority of the three-judge panel decided on Wednesday that the settlement over extended overdraft fees the bank had been charging on overdrafted accounts should go ahead. The dissenting judge took issue with the amount of money the plaintiff’s lawyers are slated to get and the level of compensation earmarked for the plaintiffs themselves.
The class action lawsuit was filed in February 2016 by lead plaintiff Joanne Farrell on behalf of herself and an estimated Class of as many as 7 million other customers who Bank of America had charged $35 for having an overdrawn account in addition to an initial $35 in overdraft fees.
Lawyers for Bank of America fought to get the case dismissed, but U.S. District Judge M. James Lorenz ultimately sided with the plaintiffs in 2016 and cleared the path for the case to proceed.
In his ruling, Judge Lorenz said the concept behind the extra Bank of America fees was akin to charging interest on a line of credit – the fees were triggered when a customer’s account become overdrawn and the overdraft protection provided by the bank kicked in.
Unsatisfied with that interpretation, Bank of America’s legal team appealed Judge Lorenz’s decision to the Ninth Circuit. Meanwhile, representatives on both sides of the class action lawsuit had been negotiating and, in October 2017, announced they had reached a tentative settlement agreement that would have Bank of America paying out $66.6 million.
The terms of the settlement would have Bank of America paying $37.5 million to reimburse customers who paid the fees in question between Feb. 25, 2014 and Dec. 30, 2017. The bank would also pay $29.1 million to customers whose accounts were closed as a result of the overdraft fees.
In addition to providing reimbursement, the bank agreed to stop charging the extended $35 fees until 2023 – unless the U.S. Supreme Court took the matter up and decided differently than Judge Lorenz that such fees should not be considered the same as interest.
The judge granted approval to the settlement deal in September 2018.
Still, the case was not over. Class Members Estafania Osorio Sanchez, Amy Collins and Rachel Threatt objected to the settlement, arguing the financial relief the Class Members stood to get was too little and the $14.5 million in legal fees awarded to the plaintiffs’ lawyers was too much.
The majority of the Ninth Circuit panel hearing their appeal disagreed on all counts.
“In short, neither the settlement nor the fee award raises an eyebrow,” the six-page majority opinion said.
U.S. Circuit Judge Andrew Kleinfeld was the lone dissenting voice. In his opinion, which supported the objecting Class Members, he said most of the plaintiffs will end up getting $1.07 per $35 fee paid. The judge also noted that those whose accounts were closed, and who suffered credit score damage because of it, would only receive $35 no matter how many of the $35 overdraft fees they had paid.
Regarding the amount of legal fees awarded to the plaintiffs’ attorneys, the majority judges affirmed the lower court’s method of calculating them based on a percentage of the total settlement award.
In his dissenting opinion, which was three times as long as the majority’s ruling, Judge Kleinfeld noted the lawyers for the Class Members reported working 2,158 hours on the case. This meant they would be compensated at a rate of $6,700 an hour – much more than their stated billing rate of $250 to $800 per hour. Had the Bank of America fees settlement be calculated based on the going rate, the legal team would have been awarded $1.42 million.
“That amount of money is not an insubstantial incentive,” Judge Kleinfeld wrote in his opinion.
Were you charged extended fees by Bank of America? Tell us about it in the comment section below.
Collins is represented by Robert Clore of Bandas Law Firm PC. Sanchez is represented by Paul S. Rothstein and N. Albert Bacharach Jr. Threatt is represented by Theodore H. Frank, Hamilton Lincoln Law Institute. The Class Members are represented by Deepak Gupta of Gupta Wessler PLLC.
The Bank of America Fees Class Action Lawsuit is Joanne Farrell, et al. v. Bank of America NA, Case Nos. 18-56272, 18-56273 and 18- 56371, in the U.S. Court of Appeals for the Ninth Circuit.
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122 thoughts onBank of America Fees Class Action Settlement to Stand
They did the double fee to me many times since 2014. I let their managers lnow that ot was usery and illegal but it fell on deaf ears. We deserve ALL of our $35 fees returned. Not a puny $1.70 per occurance…BOA needs to ne held accountable for taking advantage of people. Lastly, they need to pay!!! Nobody has received anything to date
On 02/14/2021 I received a notice of new statement from BOA for the period of 01/14/2021 thru 02/14/2021. I had a balance due of $1700 with a minimum payment of $25 due by 03/11/2021. I paid $200 upon receipt of statement. On 03/14/2021 I receive statement for 02/14/2021 thru 03/14/2021 showing a late fee of $25 for the previous pay period. Payment of $200 was posted on 02/15/2021. Again not due until 03/11. When I called to have the fee removed they said although your payment posted on 02/15 it went through our computers on 01/14 so you actually made 2 payments for January and none for February so we can’t return the fee. I explained that the payment and paperwork all reflect that the payment was made at the proper time within the pay period. Hour and a half on the phone shouting match. Still won’t return fee. This can’t be legal and I’ll bet I’m not the only one. What do I do
I had a savings account call keep the change. When I was talked into opening it because I also have a checking account. The way it works is when I use my debit card for the day, like say I buy something for 1.80. The 20 cents goes to the savings because it’s all rounded up to a dollar. Well, I realized that every month I’m paying a 5.99 maint fee and this has been for years. I also have a cc with them also. I fell on hard times and it was 0 interest for 18 months. Now the interest is 19.99 percent and I’m getting charged late fees of 39.00 even though I pay on time every month. Explained going thru hard times and keep getting run around and every month I have like 39.00 late fee and 56.00 interest charge on a balance of 4800.00. We are slaves to them and they don’t work with you and keep adding up the fees.
Bank of America ripped me off with over $6000.00 dollars overdraft fees double $35.00 Bank of America even took my kids Ssi deposit it to my acct for some dispute against sprint cell phone co and frontier communication both companies take money from Bank of America acct without my permission bank refused to refund the money back to my acct after the dispute.I can be reached at +19712043679
Bank of America has been charging me to use the ATM every time I use ATM without me knowing over the past month I noticed it has been at least $250 on top of what the ATM had charged on top of what the ATM it already charged
Me too they have done this for years! I only noticed last year.
And I am being charged maintenance fee because even though I had over $250 in direct deposit a month no single transaction was $250 so they keep charging me the fee.
Yes I was charge all those extended overdraft fee since 2014 I think it’s unfair to all of us to wait for 5 years that had thousands of dollars taken from them only get 1.07 back which Bank of america network very little expend cause us customers to pay extra atm fee and bank of america fee let’s not talk about the transfer fee thats too many fees either expand network or lower your fee
Please add me to this class action settlement. BOA is literally a Ponzi scheme.
I have been a Bank of America customer for more than 20 years and they have charged me unknown amount of times for overdraft fees. This past week they charged me $35 three times in one day and 2 more times the next day. I called to speak to someone about it and bubbled up all the way to the manager to tell me they would only reverse one $35 charge. This is outrageous! What can I do?
I’m tired of Bank of America overdraft fees. I had money fraudulently taken from my account and they charged me overdraft fees even though they confirm that the money was taken from me. Also they charged me another late fee for a processing transaction even though the money went in there within 24 hours of the transaction. They are awful with these fees they are basically stealing money.
I have evidence of my bank wire and Bank of american not applying it the “lost ” 6 payments and forced placed insurance nor did they apply any payment to principal
My name is jessie nacar I have Evidence of them removing transactions that were made on my account from vendors and editing my account to look like they never charged me overdraft fees I have photos of everything I awful have one of their own bank representatives who told me that is fraud. David Tapia is his name he was shocked today when I came in and showed him what was going on. He told me it was illegal what he seen on my account. He try to say he would help me tomorrow due to them closing at 4:00 and it was 3:30PM. I have photo of everything they made my life hell doing this they told me I did not have overdraft protection but I do. If you need help with this I have hard evidence. [310-4996646] this happen 2/16/2020 I want to file a law suite . They are removing transation as we speak and I knew from 2017 their was something up but felt pressured from. Them.and their representatives saying it was my fault.