BofA Overdraft Fees Targeted in New Class Action Investigation

BofA Overdraft Fees Targeted in New Class Action Investigation

By John Curran

Right now, it is more difficult to find a bank that is not a defendant in an overdraft fees class action lawsuit than one that is. One of the banks at the forefront of improper overdraft fee allegations is Bank of America. In fact, while it has already reached a class action settlement with an earlier class of plaintiffs, Bank of America could face yet another set of complaints.

Bank of America is the target of a new class action lawsuit investigation into allegations that its overdraft fee policy was deceptive and unfair to customers. The investigation was launched after Bank of America agreed to a $410 million class action settlement over its improper overdraft fee practices.

Bank of America not alone. TD Bank customers should be receiving checks in the mail from a March approval of a class action settlement Right now, it is more difficult to find a bank that is not a defendant in a overdraft fees class action lawsuit than one that is. In fact, while it has already settled a similar with an earlier class of plaintiffs, Bank of America could face yet another set of complaints.

It is not alone. TD Bank customers should be receiving checks in the mail from an overdraft fee class action settlement intended to offset some of the fees bank account holders had paid. Bank of America and TD Bank are just two over nearly 30 U.S. banks targeted by class action lawsuits for these alleged violations. Many of these banks have also reached class action settlements including Citizens Bank, J.P. Morgan Chase and PNC Bank.

The main charge of these class action lawsuits is that the banks reordered debit card transactions from highest to lowest in order to maximize the number of overdraft fees they could charge. Many consumers have seen multiple charges in the form of overdraft fees even on the same day. For example, if a customer made several debit card purchases over the course of a single day without enough money, they would face a charge of $25 to $35 not once, but for each time the bank was unable to draw the requisite funds. This is serious business for the financial industry; it made $22 billion on the practice in the last year alone.

Still, it is unclear whether or not they are also running afoul of regulations regarding upfront notifications to consumers that they have insufficient funds. Wells Fargo customers who do not have overdraft fee protections, for example, will not receive an email until the day following the funding issues. Another key issue is banks that post the largest charge made during the day first to ensure multiple overdraft fees, rather than doing so in chronological order.

More importantly, since 2010, banks have had to ask for customers to opt into so-called overdraft fee protection. Otherwise, the bank is required to simply decline any purchase that is more than the funds remaining in an account. Some of the overdraft fee class action lawsuit allegations argue that customers were not clearly informed of this option.

Legal investigations are continuing into the actions of companies like Bank of America and others. The first step in learning whether or not joining a class action lawsuit makes sense is to get a consultation with a skilled overdraft class action lawsuit attorney. To get one, fill out the short form at the Bank of America Overdraft Class Action Lawsuit Investigation.

Updated July 8th, 2013

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