Bank of America (NYSE:BAC) has begun contacting customers who may be entitled to a refund as part of a class-action settlement over how the bank charged overdraft fees. Bank of America has set up a $410 million fund to settle the suit, and will reimburse customers who were charged overdraft fees as a result of the bank’s processing debit card transactions in order of size, with the largest coming first, rather than chronologically.
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Anyone who incurred overdraft fees between January 2001 and May 2011 as a result of the bank’s overdraft procedure are entitled to part of the settlement. Bank of America (NYSE:BAC) is only one of nearly three dozen banks (NYSE:KBE) named in a series of class-action lawsuits over “reordering”, which the suits allege was done intentionally to increase bank revenue from overdraft fees. Banks averaged about $39 billion a year while the procedure was in place, with the Federal Reserve stepping in just last year with new regulations requiring banks to obtain a customer’s written permission before providing overdraft protection. Don’t Miss: Banks Still Can’t Escape These Heavy Legal Pressures.
Customers will be receiving postcards from Bank of America (NYSE:BAC) notifying them of the settlement and providing a web address where more information is available. Customers who are a part of the suit will automatically receive their money if the court approves the settlement in a hearing scheduled for November 7. Up to 30% of the $410 million awarded will cover the plaintiffs’ legal fees. Those wishing to file their own suit must exclude themselves from the current settlement by October 3.