Bank of America to pay $410M in settlement
The $410 million settlement comes after recent Bank of America’s announcement that it decided to cancel its wildly unpopular $5 a month debit card fee.
Bank of America has agreed to a $410 million settlement with its disgruntled customers who said they paid excessive overdraft fees.
The Monday court approval by US District Judge James Lawrence King will mean that nearly 1 million account holders will receive as much as 45 cents on the dollar on their claims – a fraction of what they actually paid in overdraft fees, Business Week reported.
Consumers alleged Bank of America and other big banks adopted policies designed to force customers to pay illegal overdraft fees. As much as 13 million customers would be able to get payment. "It's really undisputed that this is one of the largest settlements ever in a consumer case," Aaron Podhurst, a lead attorney for the customer class, told the Associated Press.
But not everyone is happy about the settlement, which a Bank of America official described as fair.
The AP reported: “Barry Himmelstein, an attorney for customers who objected to the deal, said he calculated that the bank raked in $4.5 billion through the overdraft fees and was repaying less than 10%. He said the average customer in the case had $300 in overdraft fees, making him or her eligible for a $27 award — less than one overdraft charge — from the lawsuit.”
The settlement includes an estimated $123 million in legal fees for plaintiff's lawyers, according to the San Francisco Chronicle.
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