Australia markets closed
  • ALL ORDS

    7,577.20
    +18.40 (+0.24%)
     
  • ASX 200

    7,312.30
    +9.80 (+0.13%)
     
  • AUD/USD

    0.7710
    -0.0045 (-0.58%)
     
  • OIL

    70.78
    +0.49 (+0.70%)
     
  • GOLD

    1,879.50
    -16.90 (-0.89%)
     
  • BTC-AUD

    46,421.98
    -1,776.03 (-3.68%)
     
  • CMC Crypto 200

    924.19
    -17.62 (-1.87%)
     
  • AUD/EUR

    0.6363
    -0.0002 (-0.03%)
     
  • AUD/NZD

    1.0809
    +0.0040 (+0.37%)
     
  • NZX 50

    12,550.39
    +32.38 (+0.26%)
     
  • NASDAQ

    13,998.30
    +37.95 (+0.27%)
     
  • FTSE

    7,134.06
    +45.88 (+0.65%)
     
  • Dow Jones

    34,479.60
    +13.36 (+0.04%)
     
  • DAX

    15,693.27
    +122.05 (+0.78%)
     
  • Hang Seng

    28,842.13
    +103.25 (+0.36%)
     
  • NIKKEI 225

    28,948.73
    -9.83 (-0.03%)
     

UPDATE 1-Bank of America reaches $75 mln settlement over excessive fees

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
  • Oops!
    Something went wrong.
    Please try again later.

(Adds details about bank fees, attorney's fees, paragraphs 3, 7)

By Jonathan Stempel

May 14 (Reuters) - Bank of America Corp agreed to pay $75 million to settle a lawsuit accusing the second-largest U.S. bank of extracting overdraft fees it didn't earn from customers with savings and checking accounts, court papers showed.

A preliminary settlement of the proposed class action was filed on Wednesday with the federal court in Charlotte, North Carolina, where the bank is based, and requires a judge's approval.

Customers said Bank of America often charged multiple $35 fees for insufficient funds or overdrafts on a single transaction, sometimes reflecting the bank's repeated attempts to process it at a merchant's request.

One woman said the bank charged her $105 after rejecting her $20 credit card payment and then attempting without her knowledge to "retry" processing the same payment five and nine days after the initial rejection, resulting in three $35 fees.

One woman said the bank imposed $105 in fees after rejecting her $20 credit card payment, attempting without her knowledge to "retry" processing the same payment five and nine days after the initial rejection, resulting in three $35 fees.

The plaintiffs' lawyers said that as part of the settlement, Bank of America will stop imposing multiple fees on "retry" payments for at least five years, saving customers an estimated $5.3 million a month and $318 million overall.

Bank of America denied wrongdoing in agreeing to settle. A spokesman declined to comment on Friday.

The plaintiffs' lawyers intend to seek up to $25 million from the settlement fund in attorney's fees.

Repeated overdrafts can result in account closures and leave some lower-income customers without access to banking services.

Banks have faced many lawsuits over the years claiming they sought to illegally maximize overdraft fees.

U.S. banks took in $11.68 billion of overdraft fees in 2019, according to the Center for Responsible Lending, even before the COVID-19 pandemic left millions in financial distress. Just 9% of account holders paid 84% of the fees, the nonprofit said.

The case is Morris et al v. Bank of America NA, U.S. District Court, Western District of North Carolina, No. 18-00157. (Reporting by Jonathan Stempel in New York; Editing by David Gregorio and John Stonestreet)