Unfair NSF fees were behind the Morris class action settlement with Bank of America. These fees, which have dipped recently, totaled about $30 billion per year between July 1, 2014, and July 29, 2021, the Morris class action lawsuit period. According to court documents, Bank of America juggled the books for these seven years, processing debits before credits.
Assume that, at midnight on March 1, Frank’s Bank of America account had a zero balance. As soon as he got up, he deposited $1,000. Later that day, he used his debit card eight times at $100 per pop.
Since it processed the eight debits before the one credit, Bank of America would charge him for eight March 1 debit card overdraft fees, even though he had enough money in his account to cover those debits. Furthermore, the bank wouldn’t cut off his card, so he kept running up NSF transactions.
Morris vs. Bank of America was just one of many recent consumer fraud class action lawsuits. Most companies will do pretty much anything to claim a share of a $30 billion payout. Class action lawsuits are the best way, and often the only way, to force companies like Bank of America to put profits before people.
Recent Class Action Lawsuits Against Banks
The Morris class action settlement wasn’t the only recent class action litigation involving a bank. The $75 million settlement also wasn’t the largest recent settlement.
In December 2022, federal regulators ordered Wells Fargo to establish a $2 billion settlement fund. A little over half that money went to defrauded auto loan customers. Allegedly, Wells Fargo intentionally misapplied payments, allowing it to wrongfully assess late fees and repossess vehicles.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” said Consumer Financial Protection Bureau Director Rohit Chopra said at the time. “The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”
Also recently, Capital One paid $190 million to resolve data breach claims, Bank of America/Bank of NewYork Melon settled allegations that it filed false foreclosure documents, and NFT Bank agreed to pay $5 million to resolve a similar NSF class action lawsuit.
In short, for many years, the big banks behaved very badly, and until very recently, federal regulators didn’t seem to care.
Why You Should Join a Class Action Lawsuit
Due to the nature of these proceedings, most financial class action plaintiffs only get a small percentage of their money back. Nevertheless, opting out of a class action lawsuit, which you have a right to do, is usually a bad idea.
My math isn’t very good, but I’m pretty sure part of something is more than all of nothing. And, nothing is what you’ll likely get in an individual lawsuit against a huge bank. Banks have so many high-priced lawyers it’s not even funny. They’ll create so many procedural logjams that your lawsuit will never see the light of day.
Furthermore, at the risk of sounding corny, it’s the principle of the thing. The money is important in these cases. But the money is secondary to the fact that these banks defrauded people and made excuses when they got caught. Only large class action lawsuits convince these large companies to repent.