Banks Settle Suit On Overdraft Batching
NEW YORK – Bank of America and more than two dozen large banks have agreed to pay hundreds of millions of dollars to settle claims they charged customers with excessive overdraft fees, court documents show.
In a 2009 class action suit, customers claim the banks routinely processed debit transactions from largest to smallest rather than in chronological order, causing account balances to fall faster and boosting potential overdraft fees.
They said the banks also did not clearly tell customers they could decline overdraft protection, and typically charged the fees to debit card users rather than decline transactions.
Bank customers often would rack up hundreds of dollars of overdraft fees, even when they may have been overdrawn by only a few dollars, the complaint said.
Under the terms of the settlement, BofA will pay $410 million. The settlement follows a court verdict last August ordering Wells Fargo to pay $203 million to California customers who complained about overdraft fees. The bank is appealing.