Class Action Claims Bank of America Unlawfully Rounds Up International Transaction Fees [UPDATE]
by Erin Shaak
Last Updated on May 4, 2023
Schertzer v. Bank of America, N.A.
Filed: February 5, 2019 ◆§ 3:19cv264
Bank of America, N.A. has been hit with a proposed class action that challenges its alleged practice of charging customers more than the contractual three-percent fee applied to international debit card transactions.
Case Updates
Update – March 4, 2020 – Claims Dismissed
A federal judge this week dismissed most of the claims in the case detailed on this page.
In a dismissal order, U.S. District Judge Jeffrey T. Miller stated that California law could not be applied to fees that were levied in other states, essentially striking down the plaintiffs’ attempt to represent a nationwide class.
Further, the judge disagreed with the first plaintiff’s claim that Bank of America unfairly rounded up its three-percent international transaction fee, noting that nowhere in the fee schedule did the bank state the charge would be capped at exactly three percent. The judge also stated that the first plaintiff (who was later joined by other named plaintiffs in subsequent complaints) was “ignoring” all the times when Bank of America’s rounding policy allowed the fee to be rounded down to her benefit. According to court documents, Bank of America’s “neutral rounding” of international transaction fees was necessary, and any amounts that the plaintiff may have overpaid were “trifling” at best.
“Had BofA not performed the basic math convention of rounding, the result would have been [the plaintiff] owing a fraction of a penny—which is not an amount that one can pay,” the judge stated.
The dismissal order also struck down claims raised against ATM operators in the second amended complaint regarding out-of-network fees, finding that the fees were properly disclosed to consumers and that the ATM operators did not receive a portion of the charges.
The judge has given the plaintiffs leave to amend the majority of their claims by March 25, 2020.
Bank of America, N.A. has been hit with a proposed class action that challenges its alleged practice of charging customers more than the contractual three-percent fee applied to international debit card transactions. According to the lawsuit, the bank surreptitiously rounds up the fee on each transaction to the nearest penny, which, in some cases, can amount to as much as 5.2 percent of the transaction’s value.
The Bank of America foreign transaction fee lawsuit argues that BoA promises in its standard Deposit Agreement and Disclosures that it will assess no more than a flat three-percent international transaction fee when customers make debit card purchases at international vendors, withdraw money from foreign ATMs, or use their debit cards to make online purchases from international merchants. Contrary to these representations, the bank, according to the lawsuit, applies its allegedly unlawful rounding policy to “approximately half of all international debit card transactions.”
“For example,” the complaint explains, “on a transaction amount of $10.17, Bank of America calculates the Foreign Transaction fee by multiplying 3% (0.03) x $10.17 = $0.3051. It then, systematically rounds up the $0.3051 to $0.31. However, in so doing, it violates its Personal Schedule of Fees, because $0.31 is actually 3.04% of the $10.17, not 3.00% as provided for by the contract.”
The lawsuit alleges that the unlawful fee “goes largely unnoticed by accountholders” yet allows the bank to generate significant revenue for itself when multiplied across all of its customers’ foreign transactions.
“Simply stated,” the complaint reads, “the stolen pennies add up to millions of dollars.”
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