Bank of America has arrived at a settlement in a huge lawsuit that consists of most large retail financial institutions in the U.S.
Bank of America has agreed to pay $410 million to settle a class action lawsuit over extreme overdraft charge practices. Comparable suits are being filed against other banks. Don't worry; you'll still be able to get your installment loans from these banks.
Cases become more common after fees go up
Some of the largest U.S. and Canadian banks are the target of large class action lawsuits because of the account fees and overdraft fees that have made consumers an-gry. Bank of America has one class action suit with about 1 million people in it along with other banks with similar suits such as JPMorgan Chase, Citigroup and Wells Fargo, states Bloomberg. A $410 million settlement was approved for Bank of America. Reuters explained that over 2 dozen banks in the U.S. Europe and Canada are be-ing sued for fees like these, all of which were changed to be class action suits. There is one name for the case. It is In Re: Checking Account Overdraft Litigation.
The problem with overdraft fees seen by customers
In order to create multi-ple overdraft fees instead of just one or two, Bank of America has been accused of pro-cessing largest to smallest transactions so that accounts will go into overdraft over and over instead of in the order they came in. Overdrafts can function like short term credit; the bank will fund the transaction but add a charge to the amount owed by the account holder. Fees vary by institution, though fees between $25 and $35 are common. Some consumer advo-cates do not like overdraft fees since they think it is cruel to customers that cannot afford them. Banks can no longer enroll consumers into an overdraft protection program automatically; consumers have to elect to enroll.
Bank of America going mobile
The LA Times reports there is a pilot program at Bank of America starting. After a transaction has been declined, the customer will get a text. This text will ask if the consumer wants to get an overdraft fee on the transaction and allow it to go through. The customer can then avoid the $35 overdraft charge if they're able to deposit the funds before 8 p.m. that even-ing. This is only allowed with the one transaction. It is very limited. The New York Times states that when the CFPB begins operations, overdraft fees will become essential to review. There has been a fight over the director and powers of the bureau in Congress which may stop the Consumer Financial Protection Bureau from start-ing in the near future.
Bank of America has agreed to pay $410 million to settle a class action lawsuit over extreme overdraft charge practices. Comparable suits are being filed against other banks. Don't worry; you'll still be able to get your installment loans from these banks.
Cases become more common after fees go up
Some of the largest U.S. and Canadian banks are the target of large class action lawsuits because of the account fees and overdraft fees that have made consumers an-gry. Bank of America has one class action suit with about 1 million people in it along with other banks with similar suits such as JPMorgan Chase, Citigroup and Wells Fargo, states Bloomberg. A $410 million settlement was approved for Bank of America. Reuters explained that over 2 dozen banks in the U.S. Europe and Canada are be-ing sued for fees like these, all of which were changed to be class action suits. There is one name for the case. It is In Re: Checking Account Overdraft Litigation.
The problem with overdraft fees seen by customers
In order to create multi-ple overdraft fees instead of just one or two, Bank of America has been accused of pro-cessing largest to smallest transactions so that accounts will go into overdraft over and over instead of in the order they came in. Overdrafts can function like short term credit; the bank will fund the transaction but add a charge to the amount owed by the account holder. Fees vary by institution, though fees between $25 and $35 are common. Some consumer advo-cates do not like overdraft fees since they think it is cruel to customers that cannot afford them. Banks can no longer enroll consumers into an overdraft protection program automatically; consumers have to elect to enroll.
Bank of America going mobile
The LA Times reports there is a pilot program at Bank of America starting. After a transaction has been declined, the customer will get a text. This text will ask if the consumer wants to get an overdraft fee on the transaction and allow it to go through. The customer can then avoid the $35 overdraft charge if they're able to deposit the funds before 8 p.m. that even-ing. This is only allowed with the one transaction. It is very limited. The New York Times states that when the CFPB begins operations, overdraft fees will become essential to review. There has been a fight over the director and powers of the bureau in Congress which may stop the Consumer Financial Protection Bureau from start-ing in the near future.
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