Oakland, California – Bank of America is facing a lawsuit after allegedly failing to honor its commitment to provide refunds for overdraft fees to customers suffering financial hardship due to the COVID-19 pandemic. U.S. District Judge Yvonne Gonzalez Rogers ruled in favor of the plaintiffs, stating that they had valid claims that the bank deceived them with false promises of assistance. The bank had quietly discontinued its “Client Assistance Program” on August 31, 2020, despite continuing to promote relief from overdraft and insufficient fund fees on its website and mobile app.
The program was initially launched by the second-largest U.S. bank to alleviate the financial burdens faced by its 66 million individual and small business customers in response to the pandemic. However, the plaintiffs argue that Bank of America led them to believe that it was better to incur $35 overdraft fees than to borrow from family members or seek loans, as the fees would be refunded under the program.
Judge Rogers found that the plaintiffs had adequately demonstrated that the bank advertised a program that did not actually exist. She also criticized Bank of America for failing to disclose the termination of the program while continuing to promise refunds on a case-by-case basis. The bank argued that customers would not have considered a formal announcement as significant and that it had never made promises of long-term refunds as the pandemic situation improved.
Bank of America has chosen not to comment on the court’s decision, while the plaintiffs’ lawyers have yet to respond to requests for comment. This lawsuit comes at a time when the U.S. Consumer Financial Protection Bureau has proposed measures to regulate overdraft fees at large banks, potentially saving consumers billions of dollars annually.
The plaintiffs in this case include a truck driver from California, a manufacturing worker also from California, as well as a retired widow from New Jersey. All three individuals claim that Bank of America refused to refund hundreds of dollars in overdraft and insufficient fund fees imposed on them in 2020, 2021, or 2022.
It remains to be seen how this lawsuit will unfold, as the plaintiffs seek redress for what they perceive as misleading actions by Bank of America. This case sheds light on the ongoing debate surrounding overdraft fees and the responsibility of financial institutions to their customers in times of financial hardship.