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Bank of America Faces Huge Fines in Fee Case

Citing overdraft levies and various other charges and fees imposed by the bank, a California Superior Court Judge ordered Bank of America Corp., the third-largest bank in the United States, to pay $284 million to customers who were charged fees on accounts containing customer Social Security deposits and disability checks. In addition to the $284 million award, the decision directs the bank to give each affected customer $1,000.

As many as 1.3 million customers may qualify, which could eventually increase the award to $1.6 billion. The lawsuit, Miller v. Bank of America, Civil No. CGC-99-301917, California Superior Court, arises from complaints by Paul Miller, a customer who said the bank took bounced-check fees from an account in which his Social Security benefits were automatically deposited. Bank of America notifies customers in writing that bounced-check fees can be deducted automatically from their accounts. Judge Anne Bouliane ruled that customers weren’t told the fees could be applied to their Social Security funds. An unintended consequences of the ruling is that it could make it difficult for senior citizens and other federal payments recipients in California to get overdraft protection, lenders have observed. Bank of America has said it intends to appeal the December 30, 2004, decision.

What this means to North Dakota lenders: As you know, Social Security benefits,

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