BofA Class Action Alleges Deceptive Credit Card Autopay Options

A New Jersey consumer is claiming Bank of America deliberately makes its automatic credit card payment options confusing to generate more interest revenue.

In his proposed class action lawsuit, Michael Jette reports that he opened a Bank of America credit card in December 2019. As he had done with previous cards from other companies, he immediately went to the bank’s website and set up automatic monthly payments from his bank account. His intention was to pay off the entire credit card balance each month, thus avoiding debt accrual and interest charges.

Jette says he made hundreds of dollars in purchases on his new card every month after that, under the assumption that he was paying off the full balance each month.

It wasn’t until May that he reviewed his statements and discovered Bank of America had been withdrawing only the minimum amounts due from his account. As a result, he had accrued interest charges totaling $218 on a balance of more than $4,500.

The issue, he claims, stems from the complex list of options in Bank of America’s automatic payment setup menu.

Credit card issuers generally offer customers a way to generate recurring automatic withdrawals from their bank accounts to avoid the possibility of late payment fees.

Most — including Chase Bank, Capital One and USAA — provide three options for the amount to be withdrawn: the minimum payment due to keep the account current, the balance shown on the most recent statement, or a fixed monthly amount.

American Express offers a fourth choice: “Total Balance,” clearly defined as the full account balance, including purchases made after the current statement was issued.

However, Jette argues that “Bank of America invented a duplicative fourth option that intentionally misleads consumers into incurring unwanted credit card debt and interest charges.” Above “Minimum Amount Due,” “Account Balance” and “Fixed Amount,” Bank of America provides the vague “Amount Due” as its default option for recurring payments.

Bank of America’s description of “Amount Due” reads: “Every bill has an amount due. Some bills, such as credit cards, will have additional options for paying what’s due. Selecting this option may leave a balance due. Not paying the full amount due could result in fees or finance charges.” This ambiguous explanation can be found only by clicking on a link, the filing notes.

Given the menu’s wording and construct, “reasonable consumers would expect ‘Amount Due’ to mean the statement balance, while ‘Account Balance’ would be an option similar to American Express’ fourth option (i.e., the statement balance plus any other purchases made since the statement date),” Jette maintains in his lawsuit. “At a minimum, reasonable consumers would expect ‘Amount Due’ to mean something different from ‘Minimum Amount Due,’ since that option exists independently.”

And yet, selecting the default “Amount Due” — as Jette did — has exactly the same result as choosing “Minimum Amount Due.”

“’Amount Due’ is a duplicative feature that serves no purpose except to confuse customers and inflate Bank of America’s profits,” he claims. “Bank of America, which collects interest charges as profit, makes less money when customers pay their entire account balance every month and do not incur interest.”

Jette alleges that the bank manipulates consumers into choosing “Amount Due” by setting it as the default at the top of its list of options. He also notes that the four choices are not listed in any discernible order, such as alphabetically or by payment size.

“There is no reason for Bank of America to offer both the ‘Amount Due’ and ‘Minimum Amount Due’ options other than to confuse cardholders and profit from their confusion,” he states.

Because Bank of America is based in North Carolina, its credit card agreements specify that North Carolina law applies to its accounts.

Therefore, Jette is claiming violations of North Carolina’s Unfair and Deceptive Trade Practices Act and Debt Collection Act in addition to unjust enrichment and breach of the implied covenant of good faith and fair dealing.

On behalf of himself and others who selected the default autopay option, the plaintiff is demanding a jury trial in hopes of recovering statutory damages, exemplary and/or punitive damages, court costs and any other relief deemed appropriate by the court.

Jette is represented by James C. Shah and Natalie Finkelman Bennett of Shepherd Finkelman Miller & Shah LLP; and Hassan A. Zavareei and Katherine M. Aizpuru of Tycko & Zavareei LLP.

The Bank of America Credit Card Class Action Lawsuit is Michael Jette, et al. v. Bank of America NA, Case No. 2:20-cv-06791, in the U.S. District Court for the District of New Jersey.

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