A senior judge for the US District Court for the Southern District of Florida [official website] on Monday gave final approval to a $410 million settlement in the class action suit against Bank of America (BOA) [corporate website] for overdraft fees that affected more than 13 million people. Judge James Lawrence King found this agreement to be fair and reasonable [AP report] even though customers will not be fully compensated for overdraft fees which averaged approximately $35 per transaction. Approximately 13.2 million customers who had a debit card with BOA between January 2001 and May 2011 will have money credited to their account or will receive checks from BOA as a result of this settlement. The settlement with BOA, which was reached in February, was given preliminary approval [JURIST reports] in May.
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 June, BOA announced that it has agreed to pay $8.5 billion [JURIST report] to settle claims that it sold bad securities contributing to the housing market collapse. The securities, called first-lien residential mortgage-backed securitization, were issued by the BOA unit Countrywide Financial Corporation, which it purchased for $4 billion in 2008.