Accused of Cheating Customers, Bank of America to Pay $410 Million

A Bank That Robs You!


Bank of America has agreed to pay $410 million dollars to settle a lawsuit alleging it deliberately overcharged and cheated its customers.  One of the major allegations was that it programed its computers to process transactions from largest to smallest thereby maximizing the overdraft fees it could collect from its customers/victims.  Here is how the scam allegedly worked:

Account Balance: $500.  

Transactions: $40, $60, $12, $475.

Unfair Processing Order: $500 – $475 – $60 (Charge a $35 Over Limit Fee) – $40 (Charge a $35 Over Limit Fee) – $12 (Charge a $35 Over Limit Fee) = $105 in Bank Fees

Fair Processing Order: If it treated its customers fairly, instead of robbing them, Bank of America would process the transactions like this:

$500 – $40 – $60 – $12 – $475 (Charge a $35 Over Limit Fee) =$35 in Bank Fees

The math apparently was simple for Bank of America: fleece its customers and pocket $105, or do the right thing and pocket only $35.

The case is still pending against JP Morgan Chase, Citigroup and Wells Fargo.

2 Responses

  1. RI & MA Consumer News
    RI & MA Consumer News October 12, 2011 at 2:52 pm |

    [...] previously wrote about how banks signed their customers up for overdraft protection service then deliberately let them use thei… The government stepped in to protect consumers by stopping banks from automatically enrolling their [...]

  2. Elizabeth A. LaFollette
    Elizabeth A. LaFollette April 11, 2012 at 6:51 pm |

    I bank with First Convenience Bank in Texas and they did the same thing to me. They processed the most expensive item first and then returned the other three items which were smaller amounts. Had they processed the smaller items first (which were transactions I made before the larger item) I would have only been charged 1 NSF fee. Instead they paid the larger item then returned the 3 smaller items then zapped me for 3 NSF fees at $35.00 a pop). I fought and fought with them trying to argue the fact that what they were doing was unethical. I even tried to get at least a portion of the money back. But, to no avail. They stuck by how they process transactions and didn’t blink an eye. Greedy banks.

    Elizabeth A. LaFollette

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