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.