Bank of America Reneged on Promise to Refund Overdraft, Other Account Fees During Pandemic, Class Action Alleges

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Bank of America faces a proposed class action after allegedly failing to refund punitive overdraft and insufficient funds fees despite promising to do so. 

The 28-page case says that Bank of America (BANA) “reaped enormous profits,” including hundreds of millions through the federal Paycheck Protection Program, throughout the COVID-19 pandemic while many consumers struggled financially. Although the defendant, in “an apparent bid for positive public relations,” told customers that they could request refunds for overdraft, insufficient funds and monthly maintenance fees, Bank of America “never took the steps necessary to adhere to its promises and representations,” the complaint alleges. 

Instead, Bank of America took to rejecting customer requests for the waiver of these discretionary fees, the suit claims. According to the case, Bank of America has maintained its pre-COVID policy of allowing only a “very limited number” of fee refunds and refusing to even consider refunding any additional fees regardless of a customer’s circumstances. 

As the complaint tells it, many Bank of America customers ran into a brick wall in their attempts to contact the bank to request the promised fee refunds: 

“Numerous other customers were not even able to get through to BANA. In response to an online post by BANA about its COVID-19 resources, many people made the same complaints: hold times were long, nobody answered the phone, and when someone did answer, calls would be disconnected. Despite promising to refund account fees during COVID-19, BANA did not even set up a system that would adequately allow its customers to request these promised refunds.” 

Further, the lawsuit says that customers who were eventually able to get through to the bank were nevertheless denied the promised refunds. Even when Bank of America did grant refunds, the case relays, it did so under its “non-discretionary, pre-COVID policies,” meaning the bank did not exercise discretion with regard to COVID-related requests, despite the language of its account contracts and the promises made to customers.

The suit specifies that in Bank of America’s customer contracts, the bank affords itself discretion to choose whether to charge, waive or refund overdraft and insufficient funds fees. Per the case, Bank of America, amid public pressure stemming from the economic crisis brought on by the pandemic, promised it would “exercise its discretion in favor of consumers” by refunding certain fees, and gained significantly good press in the process. 

In reality, the suit alleges, Bank of America instead misled customers and potential customers by “exercis[ing] its discretion solely in its own favor,” without consideration for the circumstances of many consumers amid the unprecedented pandemic and corresponding economic disaster. 

“These actions deny BANA’s most vulnerable customers the full benefit of the contract that BANA itself wrote,” the complaint contends. 

According to the lawsuit, Bank of America pulled in $1.1 billion in profits in 2020 from overdraft fees alone, and made $823 million solely from overdraft fees in the first nine months of 2021. The complaint relays that from the fourth quarter of 2019 through the second quarter of 2020, the U.S. economy contracted by more than 19 percent. 

The lawsuit looks to represent all Bank of America consumer checking accountholders in the U.S. who, after March 12, 2020, were charged overdraft fees or insufficient funds fees by Bank of America after it promised to consider waiving such fees due to the pandemic, attempted to seek a refund and did not receive a refund for such fees. 

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