A proposed class action claims Bank of America, N.A. has violated the terms of its customer contracts by charging multiple fees when an accountholder has insufficient funds to cover a check.
The lawsuit out of the Philadelphia County Court of Common Pleas claims that while Bank of America’s account statements specify that it may charge a single insufficient funds (NSF) fee or overdraft fee when it rejects or pays a check due to insufficient funds, the bank routinely charges a new fee each time it reprocesses the same item. According to the case, the bank’s account documents do not disclose that “this counterintuitive and deceptive result” could be possible, and instead “suggest the opposite.”
“As alleged more fully below, it is a breach of BofA’s Account Documents (defined below) and reasonable consumer expectations for BofA to charge more than one $35 NSF Fee and/or OD Fee on the same check, since the Account Documents explicitly states—and reasonable consumers understand—that the same check can only incur a single NSF or OD Fee,” the complaint reads.
The lawsuit argues that Bank of America has “unlawfully maximize[d] its already profitable fee practice” by charging double fees per item.
Bank of America’s deposit agreement and fee schedule specify that the bank will charge a $35 NSF fee if it rejects a check for insufficient funds, or a $35 overdraft fee if it pays the item, the case explains. What consumers are not told, however, is that each time a check is reprocessed after being initially rejected, the bank treats it as a “new and unique item” subject to an additional fee, the suit says.
“A check initially rejected for insufficient funds, especially through no action by the customer, cannot and does not fairly become a new, unique item for fee assessment purposes,” the complaint contends, alleging that Bank of America has violated the terms of its contracts with consumers.
The plaintiff, a Pennsylvania resident, says he wrote a $75 check in January 2017 that Bank of America initially rejected due to insufficient funds in his account. Per the case, the bank charged the plaintiff a $35 NSF fee, which the man does not dispute as this fee is allowed by Bank of America’s account documents. A few days later, however, the defendant reprocessed the same check and this time paid it into overdraft, charging the plaintiff an additional $35 overdraft fee, the case relays.
The plaintiff says he took no affirmative action to resubmit the check and did not write an additional check. Per the case, the plaintiff understood the check to be a single item that would be subject to only one fee considering there is “zero indication” in the defendant’s account documents that the same item may incur multiple fees.
“In sum, BofA promises that one $35 NSF Fee or OD Fee will be assessed per check, and these terms must mean all iterations of the same instruction for payment,” the complaint attests. “As such, BofA breached the contract when it charged more than one fee per check.”
The lawsuit looks to cover Bank of America checking account holders in the U.S. who, during the applicable statute of limitations period, were charged multiple NSF fees or OD fees on the same check. The case also proposes a state-specific subclass of Pennsylvania residents who meet the same criteria.
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