A class action settlement for $410 million between Bank of America (BOA) [corporate website] and customers claiming they were illegally charged overdraft fees was preliminarily approved on Monday in federal court. A judge for the US District Court for the Southern District of Florida [official website] approved the settlement plan [WSJ report] in which the plaintiffs' attorneys, the Alters Law Firm [corporate website], will receive as much as 30 percent of the settlement. BOA is just one of a number of large banks involved in the class action suit, including: Citigroup, JP Morgan Chase and Wells Fargo [corporate websites]. The settlement with BOA, which was reached in February [JURIST report], will provide remedy for more than a million plaintiffs in the class.
BOA is among more than two dozen US, Canadian and European lenders named as defendants in the class action lawsuit, which consolidated claims across the country in 2009. In their amended complaint [text, PDF], the plaintiffs claimed that BOA's practices were deceptive in that they did not reasonably notify customers that they had the option of opting out of the overdraft scheme and declining transactions. The complaint also alleged that BOA's excessive fees disproportionately effect low-income customers. BOA has been the target of several lawsuits. In January, plaintiffs filed a lawsuit [JURIST report] against Countrywide Financial Corporation [AP backgrounder], a BOA subsidiary, in New York State Supreme Court [official website] alleging widespread fraud that resulted in substantial financial losses.