Major banks hit with class action lawsuits over fees, bonuses, employment issues

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Bank class action lawsuits overview: 

• Who: Consumers recently filed lawsuits against Bank of America and Wells Fargo. 
• Why: The complaints include claims of discriminatory practices, misleading account holders and reneging on promised sign-up bonuses. 
• Where: The lawsuits affect consumers nationwide.

Bank of America and Wells Fargo have recently been on the wrong end of lawsuits, with claims against the banks involving discriminatory practices, misleading accountholders and sign-up bonuses. 

Wells Fargo failed to adequately address issues involving discriminatory practices, lawsuit claims

A shareholder filed a lawsuit against Wells Fargo last month over claims the bank failed to adequately address issues involving discriminatory practices in its hiring and lending processes. 

The shareholder argues the bank breached its fiduciary duties by allegedly failing to monitor its lending and hiring practices that are allegedly discriminatory against minorities. 

“Wells Fargo and its board have repeatedly failed to address the fact that the company’s algorithm resulted in digital redlining, despite recognizing the importance of ensuring that the company must not discriminate against minority borrowers,” the Wells Fargo lawsuit states.

BoA accused of false advertising, charging undisclosed fees on incoming wire transfers

A consumer filed a class action lawsuit against Bank of America last month, arguing the bank falsely advertised it would provide a sign-up bonus for opening a new credit card. 

The lawsuit claims Bank of America fails to pay the allegedly promised sign-up bonuses, including for consumers who signed up for a new Bank of America credit card in person or via telephone. 

“Whether the misrepresentation was made online or orally by Bank of America, members of the ‘Class’ were promised that they would receive their full, as advertised Sign-Up Bonus if they met the stated spending minimum within the time required,” the Bank of America class action states.

In a separate class action lawsuit filed in July, a Bank of America consumer’s father alleges the financial institution misled its personal account holders into paying undisclosed fees on incoming wire transfers. 

The plaintiff claims the bank charges account holders in New Jersey $15 for an incoming wire transfer domestically and $35 internationally. 

“Plaintiff and similarly situated personal account holders are shocked when – after no warning and no disclosure – they are assessed Incoming Wire Transfer Fees after receiving wire deposits into their accounts,” the Bank of America class action states. 

Bank of America fined $150 million for alleged violations

The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC), meanwhile, levied a fine of $150 million against Bank of America in July. 

They issued the fine over claims Bank of America misled customers about credit card bonuses, opened credit cards without consent and charged account holders improper non-sufficient fund fees. 

Bank of America’s fine includes $60 million in civil penalties from the CFPB and $90 million in civil penalties from the OCC. The bank will also pay $80.4 million toward refunding customers who the bank allegedly charged improper non-sufficient funds fees. 

“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” CFPB Director Rohit Chopra says in a statement. 

Bank failures partly to blame for rise in securities class actions, while standards for consumer loans have tightened, reports say

In other banking news, Cornerstone Research released a report last month that revealed bank investors made more securities class action filings in the first half of the year than in all of 2022 combined. 

The data, which appears in Cornerstone Research’s 2023 Midyear Assessment for securities class action filings, indicates the increase in securities class action can partly be attributed to a number of bank failures creating instability in the financial industry.

“While filing counts rose by 23%, average filing size grew as well, leading to increases of (maximum dollar loss) by 152% (the highest semiannual total recorded) and (disclosure dollar loss) by 45%,” the Cornerstone Research report states.

In another report released last month, the Federal Reserve says it found standards across the residential home loan industry tightened amidst a period of weakened demand. 

The report, which consisted of surveyed bank loan officers, reveals standards for all types of consumer loans have tightened, demand for auto loans has dipped and credit card loans have remained unchanged. 

Have you been impacted by a recent Bank class action lawsuit? Let us know in the comments. 

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