Bank of America has reportedly agreed to pay $75m in the settlement of a lawsuit, which accuses the bank of extracting overdraft fees it didn’t earn from customers with savings and checking accounts.
A preliminary settlement of the proposed class action was filed with the federal court in Charlotte, North Carolina, which is where the bank is based, according to a report from Reuters. The document needs a judge’s approval.
Customers claim the bank often charged several $35 fees for insufficient funds or overdrafts on a single transaction. These often reflected multiple attempts from the bank to process it at a merchant’s request.
One example offered by Reuters details a woman that alleges Bank of America charged her $105 after rejecting a $20 credit card payment. The bank had attempted to reattempt processing the same payment five and nine days after the first rejection, without alerting her to the this. This resulted in three $35 fees, it claims.
As part of the settlement, Bank of America will stop imposing multiple fees on retry payments for a minimum of five years. This will save customers an estimated $5.3m a month and $318m overall, it said.
The plaintiffs’ lawyers are seeking $25m from the settlement for attorney fees.
Bank of America denied wrongdoing in agreeing to settle.
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