$410m settlement in lawsuit against BOA overdraft fees
A settlement in a class action lawsuit against Bank of America over its practices regarding debit card fees for overdrawn checking accounts was approved by U.S. District Court Judge Lawrence King for $410 million.
The settlement affects about 13 million Bank of America customers who incurred debit card fees of $35 per overdrawn transaction over the past 10 years. The average customer had about $300 in debit card fees over this period.
The suit concerned the bank’s practice of processing debit card transactions so that the highest dollar amount was counted first in order to could maximize the overdraft fees.
According to the Washington Post in “Judge approves $410 million settlement of lawsuit against Bank of America on overdrawn fees,” Judge King felt the settlement was fair despite objections over the average payout, the amount of the settlement, and the legal fees to be paid to the class action attorneys.
By their nature, class actions rarely result in satisfactory settlements to the average class member, but do achieve huge paydays for the attorneys. In this case, the average class member will receive $27, which is far less than what they sustained in fees and is less than a single overdraft fee of $35.
The class action attorneys will garner $123 million in legal fees. An attorney for a bank customers’ group that objected to the settlement pointed that out that Bank of America will profit regardless of the settlement since it gained about $4.5 billion in overdraft fees.
Information in this post gathered in association with a Cincinnati Criminal Lawyer.
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