Bank of America Agrees to $75M Settlement for Excessive Fees
Bank of America Corp agreed to pay $75 million to settle a lawsuit over overdraft fees. The lawsuit alleges the second-largest U.S. bank charged overdraft fees it didn’t earn from customers with savings and checking accounts.
Customers said Bank of America often repeatedly charged multiple $35 fees for insufficient funds or overdrafts for the same transaction. The bank repeated attempts to process declined transactions at a merchant’s request. One woman said the bank charged her $105 after rejecting her $20 credit card payment and then attempting without her knowledge to “retry” processing the same payment five and nine days after the initial rejection, resulting in three $35 fees.
Repeated overdrafts can result in account closures and leave some lower-income customers without access to banking services. Banks have faced many lawsuits over the years claiming they sought to illegally maximize overdraft fees. U.S. banks charged a total of $11.68 billion of overdraft fees in 2019, according to the Center for Responsible Lending. Just 9% of account holders paid 84% of the fees. If you get charged a fee from your bank, it’s a good idea to reach out and ask if they can refund you. They will often do this as as courtesy if it is a rare occurrence.
As part of the settlement, Bank of America will stop imposing multiple fees on “retry” payments for at least five years, saving customers an estimated $5.3 million a month and $318 million overall. As it’s usually the case with settlements, Bank of America denied wrongdoing. If you are part of this settlement you should be notified as soon as it is approved.