Bank of America starts overdraft rebate outreach
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If you had a Bank of America account with a debit card between January 2001 and May of this year, you may be due some cash.
The nation's largest bank has started contacting customers who may be entitled to a refund. It recently reached a class-action settlement over the way it charged overdraft fees. Most of the other suits are continuing to work their way through federal court in Florida.
Bank of America agreed to set up a $410 million fund to settle the lawsuit. The money will be used to pay back customers who were charged overdraft fees as a result of the company's policy of processing debit card transactions based on the size of the transaction, rather than when the purchases occurred.
The bank is one of about three dozen named in a series of class-action lawsuits over the practice of "reordering." A policy that became widespread in the 2000s, reordering involves deducting purchases from an account starting with the largest dollar amount first. That means a customer may end up paying additional overdraft fees.
For instance, someone with an account balance of $95 and who made three purchases in one day, the first for $5, the next for $25 and the last for $75, would be charged two overdraft fees, rather than one.
The suits claim that reordering was done to intentionally increase the number of overdraft fees collected. Banks took in about $39 billion in overdraft fees annually before the Federal Reserve put new rules in place last year. Now banks are required to obtain a customer's written permission before providing overdraft protection.
To inform customers that they may be eligible for a refund of some overdraft fees, Bank of America is sending postcards to customers with a brief explanation of the settlement and the address of a website where more information is available.
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Nicholas C. Minshew - Minshew & Ahluwalia LLP
Nicholas C. Minshew, Attorney at Law, concentrates his practice in the area of Family Law including divorce, separation, child support, child custody, alimony, division of property, separation agreements, domestic violence, prenuptial agreements, and child support enforcement & modification. Mr. Minshew provides legal services to clients in Washington, D.C., and throughout Maryland, including Montgomery County, Frederick County, and Prince George’s County. Mr. Minshew obtained his Juris Doctorate degree from the American University, Washington College of Law in 2000, where he worked as an editor for the Administrative Law Review. After receiving his law degree, Mr. Minshew worked as an attorney for the global law firm of Morgan, Lewis & Bockius LLP, and for Leonard Street & Deinard LLP representing companies in Federal proceedings. During that time, Mr. Minshew redirected his focus to provide legal services directly to individuals and families.