FTC Disclosure:

I am not paid or compensated in any way to write product reviews posted to this blog. There are affiliate links posted throughout this blog. So, when you click through on links and buy something, I may receive a commission. I pay for the products with my own funds. Product reviews always reflect my own experience with and honest opinion of the product as a consumer.

Monday, August 1, 2011

Bank of America Settles a $410 Million Class Action Lawsuit for Overdraft Fees

I was reading the news recently, and found out Bank of America settled a class action lawsuit for $410 million dollars in the case, In Re: Checking Account Overdraft Litigation, U.S. District Court, Southern District of Florida, No. 09-md-02036 for overdraft fees to their customers.  So far the settlement is tentative and is scheduled for final approval by the Federal District Court in Florida, in Miami on Nov. 7, 2011.  Several banks are defendants in the lawsuit, such as Wells Fargo, Citigroup, U.S. Bank and JP Morgan Chase to name a few.  The banks were accused or re-sequencing transactions in order to charge more overdraft fees to account holders.

According to www.bofaoverdraftsettlement.com, Bank of America account holders will receive a postcard in the mail with information regarding the recent settlement. Customers who have had their accounts debited for overdraft between January 1, 2001 and May 24, 2011 may qualify for a portion of the settlement. The class members don’t have to fill out any forms, and Bank of America accounts will be automatically credited in the future. Class members that no longer have an account with Bank of America may receive a payment.

How Bank of America screwed customers (with no Vaseline)

Bank of America systematically rip-off their checking account customers, who have low balances in their checking accounts. This rip-off system affects people who live pay check to pay check, rendering them unable to keep large sums of money in their checking account. All it would take is a miscalculation of the account balance by $.01 in order to start a chain reaction of overdraft fees.

The way that their system worked previously, is that transactions were not debited from your account in the order in which they were done. Bank of America would let the larger transaction get processed first, and then debit the smaller transactions.

Example: You have $600 in your Bank of America checking account. You use your ATM/debit card for the following  7 transactions in one day. The transactions are done in the order listed.

TransactionAccount Balance 
Starbucks Latte  $4.00           $596.00
Groceries            $52.00    $544.00
 Cable bill            $65.00   $479.00
Cell phone            $65.00    $414.00
ticket                     $75.00        
insurance             $135.00

Car payment        $300.00-$96.00
Total transactions
-$131.00 after overdraft charges

Okay, so you realize later on that you went over by $96.00. You expect that your account will get debited for a $35.00 overdraft fee for the $300.00 transaction. The way that you see it, there was enough money in your checking account when 6 of those transactions were done. When you check your account statement you nearly collapse when you find out that you have $105 in overdraft fees. This is because Bank of America debited the transactions in the following order:

TransactionAccount Balance
Car Payment                $300.00                        $300.00
insurance            $135.00
Parking ticket                      $75.00       $90.00
Cell phone             $65.00    $25.00
Cable bill               $65.00   -$40.00
Groceries              $52.00-$92.00
Starbucks latte      $4.00 -$96.00
Total transactions
$ 696.00
-$200.00 after overdraft charges


That latte at Starbucks cost you $39.00. This type of situation happened to me so many times that its shameful. I accept responsibility for overdrafts that were due to my own error in calculations. However, this game of letting larger transaction go through first is a money making scheme and it is dead wrong.

Well, I am a former Bank of America customer of nearly ten years, and I can attest to their very predatory overdraft fees. I estimate that within the ten year time frame that I held a checking account, my account was debited over $2,000 in overdraft fees. Their overdraft charge is $35.00 per transaction, and many times I was charged this fee for transactions of less than $10.00. When I received unemployment benefits in 2009, there were instances when my entire UE benefit was eaten up in overdraft fees, since the benefits were direct deposited into my checking account. During these tough times, I would look at my checking account statement and immediately become depressed and teary-eyed.

In order to prevent my unemployment benefits from getting stolen by Bank of America, I had to set up a checking account at another bank. I did it before my Bank of America account was closed and reported to ChexSystems. I also started to use low cost prepaid debit cards for most of my purchases, in order to dramatically reduce the chances of getting charged overdraft fees. My checking account at Bank of America is now closed.

No amount of pleading, cursing, screaming, and demanding will get overdraft fees deleted from a Bank of America checking account. In 2009 my checking account was debited for 10 overdraft fees in one month. I called up Bank of America almost every day for about a week to try and get my money back. The customer service reps were unsympathetic, although one of the reps gave me one “courtesy” refund of overdraft fees. So, I was left with a total of $315.00 in overdraft fees. Another Bank of America customer service representative had the audacity of give me a lecture in balancing checkbook to avoid overdraft fees. My response to this customer service representative was, “The best way for me to avoid overdraft fees, is for me to stop using your services.” It left her speechless.

I use my checking account in good faith. So when I write this blog post, it is not intended to support the practice of writing checks or using your ATM debit card, knowing that there is no money in your checking account. That is not cool. I am talking in support of banking customers that make genuine errors in their calculations from time.  Although Bank of America officials do not admit to any wrongdoing or culpability, they obviously knew that they would not win the case, so they settled in order to avoid a costly trial. Having bilked their customers out of probably billions of dollars in overdraft fees, It is still a win-win situation for Bank of America.

We as consumers need to boycott Bank of America, Chase, Citibank, and other banks that participated in this unscrupulous practice. There are many local community banks and credit unions that would be more than happy for our business. We need to show these banks that unethical corporate practices will not be tolerated. Our hard earned money, is lining the pockets of greedy corporate officers. These actions are obviously, not in the best interests of the customers.

The Federal Reserve prohibits banks from automatically charging their customers an overdraft fee, unless the customer opts-in for overdraft protection. In other words, the customer must agree to accept the overdraft protection provided by the bank and agree to the overdraft fees. I am surprised that the government allowed this to go on as long as it did.

Just as an aside, Bank of America reported a loss in profits, this recent quarter. Pretty astounding, considering the amount of customers that they have been ripping off. I call it divine retribution.




Related Posts: 

Another Reason to Hate Bank of America, Wells Fargo, and Other Big Banks

Copyright 2011- http://www.thewhimsicalmusingsofsusan.com/

No comments:

Post a Comment

This blog is moderated. Please do not spam this blog. Any comments that include promotional links will be deleted. Thanks.


2013MTV Video Music Awards (1) 3G network (2) 401k (1) 4G network (2) advertisements (1) Air Wick Freshmatic Ultra Odor Detect Spray kit (1) Alberto VO5 2-in-1 shampoo + conditioner (1) Android (1) anti-aging skin care products (1) antioxidants (1) Aquaphor Healing Ointment (1) ATand T Flash mob commercial (1) Autozone (2) Aveeno active naturals 1% Hydrocortisone Anti-Itch cream (1) baby wipes (1) bad boss (1) bad job interviews (1) badmouthing (1) balance transfer (1) Bank of America (1) Bank of America $410 million lawsuit (1) Bank of America overdraft class action lawsuit 2011 (1) Bank of America scam (1) bargain shopping (17) Bayer Contour USB Blood Glucose Meter (1) beggars (1) Bic Soleil Bella razors (1) Biore pore unclogging scrub (1) Blendtec comparison (1) Blueberries (1) braids and weaves (1) Breville Juice Fountain Compact BJE200XL (1) buying habits (1) buying stuff off the streets (1) Caitlyn Bruce Jenner (1) call center (1) Car buying (1) car maintenance (1) Car salesman (1) Celestial Seasonings Sleepytime Extra Tea (1) cell phone (1) child abuse (1) Christian hypocrisy (1) collection agency (1) college debt (4) colon cleanser (1) complaining about your job (1) compression stockings (2) compression therapy (2) consumer credit counseling service (1) corporate corruption (1) corporate lobbyists (1) Cosmetic Surgery (1) count your blessings (1) coupon basics (1) coupons (21) credit card (1) credit card debt (1) Creme of Nature Replenishing Sheen Spray with Argan Oil from Morocco (1) CSR job (1) customer service (4) Customer service representative (1) cutting your grocery bill with coupons (2) CVS (16) CVs 100% Organic Cotton Tote Bag (1) CVS ExtraCare Rewards Program (16) CVS Green Bag Tag (2) Dax Pomade (1) dead snake in the grass (1) dealing with cockroach infestation (1) debit card fee (1) debt (1) debt collection (1) Debt Collectors (1) debt consolidation (1) debt consolidation loan (1) debt settlement (1) difficult people (1) Digital Coin Counter (1) distracted driving bicycling and walking (1) doctor (1) Dodd-Frank Wall Street Reform (1) Dove Damage Therapy Intensive Repair Conditioner (1) Dove Damage Therapy Intensive Repair Shampoo (1) Dr. Scholl's Advanced Comfort shoes (1) Dr. Scholl's gel insoles (1) dumb spending habits (1) Durbin Amendment (1) education (1) Effects of Type II Diabetes and High Blood Pressure on the Kidneys (1) emotional baggage and trauma (1) employment (4) employment issues (5) Extra strength Benadryl Itch Stopping Cream (1) Extrabucks (4) Fair Debt Collection Practices Act (1) Family and money (1) family disputes over money and property (1) fast food (3) Federal Income tax returns (2) Femininst Movement (1) Ferguson (1) fibroids (1) fiscal cliff (1) fishing pier (1) Florida (1) Florida beaches (1) Florida living (1) Florida tourism (1) Florida travel (1) food allergies (1) foot pain (1) free coupons (1) FTC (1) Futuro Energizing Ultra Sheer Knee Highs for Women (1) Games that Men Play (1) garnish wages (1) get fired (1) get free coupons in the mail (1) Ghetto people (2) Gillette Daisy Razors classic (1) Gillette Venus and Olay Razor (1) Going natural (1) Google (1) gratitude (1) hair care (4) harassing bill collectors (1) harassing phone calls (1) harassment by bill collectors (1) health benefits (1) health benefits of juicing (1) Healthcare system (1) higher education (4) higher taxes (1) home equity loan (1) homelessness (1) Hot Shot MaxAttrax Roach Killing Powder with boric acid (1) hotels (1) hotels.com (1) How to deal with a cheating spouse (1) How to Keep Your customer service job (1) Huggies Natural Care Thick N Clean (1) hurting feet (1) illegal debt collection (1) Individual Retirement Account (1) interest rate (1) internet (2) Interracial dating and relationships (1) IRA (1) Is the Ninja blender any good? (1) Iyanla Fix My Life (1) Iyanla Vanzant (1) job interview (1) Johnson and Johnson (1) junk food (2) knowledge (1) L'Oreal Youth Code (1) La Quinta Inn and Suites (1) lactose intolerance (1) Lady Speed Stick Invisible Dry deodorant (1) lawsuit (1) learning (1) lending money to family (1) let go of toxic people (3) LG Optimus V Android Smartphone (1) lingere (1) local calling (1) Lysol Disinfectant Spray (1) make money online (1) manipulators (1) mass transit (1) McDonald's McCafe Stawberry Banana Smoothie (2) medical (1) Metro PCS (1) Miley Cyrus (1) mindset (1) MO (1) money (1) Money Saving Jar (1) muscle soreness (1) Myoflex Odorless Pain Relief Ointment (1) Natural hair care (2) natural treatment fibroids (1) natural ways to shrink fibroids (1) Nature's Secret Ultimate Cleanse (1) never miss a golden opportunity to shut up (1) New Balance Walking shoes (1) New Thought movement (1) Ninja NJ600 Bender (1) Ninja Professional Blender NJ600 (1) Nivea Kiss of Flavor Cherry Tinted Lip Care (1) Novatel Ovation MC760 USB Modem (1) Nutella Hazelnut spread with cocoa and skim milk (1) nutrition (1) Occupy Wall Street (1) online paid surveys (1) Organix (1) Organix hydating Moroccan Argan Oil Creamy Oil Body Wash (1) overdraft fees (1) OWS (1) pain relief (1) Panhandlers (1) panties (1) passenger trains (1) pay negotiation (1) paying for college (2) payroll taxes (1) pest control (1) plastic surgery (1) polyphenols (1) Pompano Beach (1) poverty (1) problems with the church (2) Product Reviews (46) Prosperity Gospel (2) Prosperity Pimp Preachers (1) protests (1) Pterostilbene (1) Public schools need improvement (2) public transportation (1) Publix (1) Purpose Gentle Cleansing Wash (1) Rachel Dolezal and transracialism (1) Raid Max Bug Barrier with Auto Trigger (1) random (1) Ratchet behaviors (1) Reality TV (1) Register Rewards (1) relationships and dating (1) religion and Christianity (2) respect for patients (1) retinol (1) retirement (1) Review of Aveeno Active Naturals Skin Relief Calming Lotion with Cooling Action (1) review of Cascadian Farms Organic Cinnamon Raisin Granola Cereal (1) Review of Dawn Hand Renewal with Olay Beauty (1) Review of Gain Ultra Antibacterial Hand Soap/Dishwashing Liquid (1) Review of Kashi TLC Chewy Granola Bars (1) Review of Lever 2000 bar soap (1) Review of Monster Energy drink (1) review of Special K Protein shakes (1) Review of Suave Advanced Therapy Body Lotion (1) Review of Toshiba Satellite laptop L505-ES5018 (1) review of Virgin Mobile Broadband2Go (1) roach infestation (1) roaches (1) Robin Thicke (1) Roc Retinol (1) Roc Retinol Correxion Deep Wrinkle Serum (1) Roc Retinol Correxion Sensitve Eye Cream (1) sabotage in the workplace (2) Sandra Bland (1) saving money (16) saving on groceries (1) scam artists (1) scams (1) Sears (1) sexual harassment (1) shopping (16) shopping haul (16) skin care (6) skincare (2) smartphone (1) smoothies (1) So Delicious coconut milk unsweetened (1) social media (1) Social Security (1) SoftSheen Carson Sta-Sof-Fro Hair and Scalp Spray (1) spider veins (2) squandered legacy (1) Stank of America (2) stolen property (1) student loan (3) student loan default (1) stupid people (2) submission in relationships (1) surgeon (1) T-Mobile (1) Taco Bell Frutista Freeze (1) technology (1) telephone sales (1) the dangers of milk and eggs (1) The Law of Attraction (1) The Secret (1) The shooting death of Mike Brown (1) the value of a college education (1) TLC Extreme Couponing show (1) Tom's of Maine Long Lasting Deodorant (1) toxic people (4) toxic relationships (1) Traction Alopecia from wigs (1) trains (1) transgender issues (1) transitioning to natural hair (1) travel arrangements (1) travel booking (1) Tri-Rail (1) TV commercials (1) U by Kotex (2) U by Kotex Clean Wear Heavy Flow Pads (1) U.S. Department of Educastion (1) underwear (1) varicose veins (2) vicarious liability (1) Victoria's Secret (1) Victoria's Secret sale (1) Virgin Mobile TopUp Card (1) Virgin Mobile Wireless (1) virtual dating and courtship (3) Vitamix comparison (1) Walgreens haul (1) Walmart (2) wasteful spending (1) wasting income tax return money (2) wasting money (2) ways to earn money online (1) ways to make money (1) ways to make money when you don't have a job (1) wealth (1) Wells Fargo (1) what are coupons (1) What is ghetto? (2) Wheat thins (1) Wheat thins commercial (1) Where to buy Ninja blender? (1) where to find coupons (1) White male dominated establishment (2) why are people so mean to children? (1) Why do women forget they are wearing a tampon? (1) Why I Don't Go to Church (4) Why you should not allow others to drive your car (1) Wild Growth Hair Oil (1) Winn-Dixie (1) wireless service (2) Women's rights (1) workplace assholes (2) Workplace racism (1) workplace sexual harassment (1) X Factor (1)