|Bank of America Settlement
||[Feb. 4th, 2017|05:36 pm]
So, I got a check from the Bank of America overdraft lawsuit.
This was a class-action suit against B of A over how they handled overdrafts. Bank of America was found guilty of intentionally arranging the order of deposits and payments in such a way as to maximize overdrafts.
For example, say you have one large and several smaller payments that are all done on the first of the month. Bank of America would process the largest of the payments during the day first, so that if there wasn't sufficient money in the account at the time for all the payments, they could charge each of the smaller payments a $38.00 fee, instead of processing the smaller ones first and getting to charge a single $38 overdraft fee for the largest.
So a bunch of their customers took them to court over this in a class-action lawsuit. They were found guilty. And, in punishment, had to pay back... well, I don't know how much. But my share was $5.00.
Yep, charge multiple customers multiple charges of $38 each, most likely a couple of times a month, for years. I don't know how much that got running that scam, but I'm guessing it was more than an average of $5.00 per customer.
Now, this one wasn't even illegal, like the time a "computer error" caused a whole bunch of their customers to be randomly charged a $20 fee for no reason. (I saw that one myself a few times, and every time I called about it, they quickly took it off and re-credited my account.)
Or the time they were caught suddenly increasing the payments due from the spouses of service members who deployed to the gulf. Yeah, they got a bit of outrage from the right wing on that one. But only a little bit. After all, capitalism.
In both of those cases, they had to pay back somewhere between 10% - 50% of what they took, depending on whose estimates you believe.
In this case, a case could be made (though, obviously unsuccessfully, as they lost the suit) that it's 100% the customers fault for not having enough money in their accounts to cover all their bills. But I'm sure $5.00 doesn't come anywhere near what they got away with. Especially because they are perfectly aware that, given the small amount on the check, only about 10% of recipients will bother to cash it.
But, with the Republicans all gung-ho to roll back every bit of consumer protection and regulation on the banks, this is a good reminder to keep a careful eye on what your bank is doing. Read the terms and conditions, and check your balance frequently.
The best thing to do to protect yourself is to get away from the big banks altogether. If you're in one of the vanishingly small areas that have local banks still, go there. Or switch to a credit union. I'd advise you to do it now, before they roll back the Obama era law that made it illegal for them to charge you any fees after closing your account.