Bank of America recently settled a class action lawsuit regarding the bank’s overdraft fees. The lawsuit charged Bank of America with engaging in “deceptive practices in the management of customer accounts” resulting in excessive overdraft fees. Specifically, the suit claims the bank purposely debited money into customer accounts in a way to maximize overdraft fees. One way to do this is to debit larger items before smaller ones, rather than in chronological order to increase the chance of a customer going into overdraft.
Bank of America has now reformed all of its overdraft policies, so customers can no longer automatically overdraw from their accounts but rather their card will just be declined if they have insufficient funds.
The new method alleviates the chances of getting unexpected overdraft fees. This way, if a customer wants to have the option of overdraft, they can opt in rather than being involuntary committed to it.