Class Action Alleges Bank of America Discriminates Against Iranian Customers By Restricting, Closing Accounts

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A proposed class action lawsuit alleges Bank of America has discriminated against consumers of Iranian descent by arbitrarily restricting and closing their accounts. 

The 42-page complaint was filed by a permanent U.S. resident and Iranian immigrant who alleges Bank of America identifies individual account holders with connections to Iran and “restricts or closes their accounts.” The plaintiff also alleges BoA sometimes conditions an individual’s access to their account based on the fulfillment of “an arbitrary and pretextual requirement,” such as providing redundant or otherwise unnecessary documents. 

“In other cases, an individual may simply discover that their account has been restricted or closed and Defendant refuses to offer an explanation or justification for its actions,” the case alleges. 

When Bank of America restricts or closes an account, the account holder loses access to their funds and may be unable to complete essential transactions, such as pay rent, a mortgage or utilities bills, the suit stresses. Customers with restricted or closed accounts may also incur fees for bounced checks or late payments, or other charges due to being unable to access their funds or credit lines, the case says. 

Moreover, Bank of America’s apparent account restriction/closure practices have caused proposed class members to be denied the opportunity to use or obtain financial services from the bank, including mortgages, personal loans, insurance or financial consulting, for several years, the lawsuit claims, noting customers’ credit histories may also be harmed due to the alleged conduct. 

“Plaintiff and the members of the Class have suffered direct and proximate damages, including lost time, the loss of credit card reward points, and suffered financial hardships arising from the sudden loss of their accounts, including damage to their credit history,” the filing says. “They have also suffered the indignity of discrimination.” 

According to the lawsuit, the plaintiff moved to the United States from Iran in 2011 to obtain a doctoral degree in physics, and possessed a student visa to do so. Per the suit, the plaintiff first opened a credit card account with Bank of America in late 2015, and primarily used his card until late 2019 to buy groceries and restaurant meals. 

In the fall of 2019, the plaintiff, according to the lawsuit, “became a victim of Defendant’s discriminatory business practices” when Bank of America “arbitrarily restricted and then closed his credit card account.” The case says Bank of America did this even after the plaintiff provided valid proof of residency—a valid Form I-797C, issued by the U.S. Citizenship and Immigration Services—that the bank indicated would satisfy its residency requirement. 

The filing claims a BoA representative, in response to the plaintiff asking for clarification, said to the man over the phone, in words or substance, “we don’t have to do business with you.”

The plaintiff claims he was never provided an explanation as to why Bank of America closed his account. The lawsuit alleges the plaintiff “felt humiliated and demeaned” by Bank of America’s behavior, and worried he would be unable to avail himself of future financial services with the bank or other financial institutions as a result. 

The proposed class action alleges Bank of America’s closure of the plaintiff’s account is “an instance of a larger pattern of discrimination against persons of Iranian or Middle Eastern descent based on their race, religion, ancestry, citizenship, and/or immigration status.” 

Alleged in the suit are violations of the federal Equal Credit Opportunity Act, U.S. civil rights law, California Unruh Civil Right Act and the state’s Unfair Competition law. Initially filed on August 27, 2021 in San Diego County Superior Court, the lawsuit was removed to California’s Southern District Court on October 21. 

The lawsuit looks to represent all current or former Bank of America credit card or checking account holders with a first or last name of Iranian or Middle Eastern origin who had an account closed within six months after Bank of America sent a request for documents establishing residency in the United States. 

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