NEWS ARTICLE
November 8, 2011
Washington Post, "Judge approves $410 million settlement of lawsuit against Bank of America on overdraft fees"
A federal judge on Monday gave final approval to a $410 million settlement in a class-action lawsuit affecting more than 13 million Bank of America customers who had debit card overdrafts during the past decade.
Senior U.S. District Judge James Lawrence King said the agreement was fair and reasonable, even though it drew criticism from some customers because they would only receive a fraction of what they paid in overdraft fees. The fees were usually $35 per occurrence.
"It's really undisputed that this is one of the largest settlements ever in a consumer case," said Aaron Podhurst, a lead attorney for the customer class.
The settlement became final a week after Charlotte, N.C.-based Bank of America backed off a plan to charge a $5 monthly fee for debit-card purchases. The outcry prompted other major banks, including JPMorgan Chase & Co. and Wells Fargo & Co., to cancel trial tests of their own debit card fees.
Customers will receive a minimum of 9 percent of the fees they paid through the settlement, Hutt added. The bank has already paid the money into an escrow account.
The lawsuit claimed that Bank of America processed its debit card transactions in the order of highest to lowest dollar amount so it could maximize the overdraft fees customers paid. An overdraft occurs when the account doesn't have enough money in it to cover a debit card transaction. Similar lawsuits have been filed against more than 30 other banks.
Read the full article on the Washington Post site.
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