A huge class action suit concerning overdraft fees involving Bank of America recently was settled by the giant retail bank.

Bank of America has agreed to pay $410 million to settle a class action lawsuit over extreme overdraft fee practices. Extreme overdraft policies are the subject of an enormous class action, involving about one million people and more than two doz-en banks, including Bank of America. Do not worry; you’ll still be able to get your installment loans from these banks.

Dozens of banks sued for account charges

Consumers have been really upset about the overdraft fees and account fees at major financial institutions in both Canada and the U.S. This has brought on some class action lawsuits to be filed. Bank of America has one class action suit with about 1 million individuals in it along with other banks with comparable suits for instance JPMorgan Chase, Citigroup and Wells Fargo, states Bloomberg. A $410 million settlement was approved for Bank of America. Reuters explained that over 2 dozen banks in the United States. Europe and Canada are be-ing sued for fees like these, all of which were changed to be class action suits. There is one name for the case. It is In Re: Checking Account Overdraft Litigation.

Problem with additional overdraft fees

Transactions at Bank of America are supposedly processed from largest to smallest instead of by date. This allows the bank to get lots of little overdrafts instead of one big one causing more overdraft fees to be charged. Short term credit and overdraft fees are very easily compared. The bank will les the trans-action be made as a “loan” to the consumer and then charge a charge for it. Normal fees are between $25 and $35. Several customer advocates consider overdraft protections and fees to be abusive to less fortunate customers. Banks cannot automatically put customers in overdraft programs anymore. Customers have to pick that choice.

Bank of America program to start

Soon a pilot program at Bank of America will start. The Los Angeles Times reports this will be for mobile banking. If a transaction is declined for insuffi-cient funds, the customer will receive a text message giving the consumer the choice to have the bank cover the overdraft. The consumer can then stay away from the $35 overdraft charge if they are able to deposit the funds before 8 p.m. that even-ing. This is only allowed with the one transaction. It is very limited. One thing the CFPB will be working on is the overdraft charge problem. This is after it begins operations soon, reports the New York Times. The CFPB is involved in an ongoing Congressional tug-of-war over the director posi-tion and what powers the bureau should have.

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