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Ruling may cost BofA millions
Charlotte Observer ^ | Decmber 31, 2004 | JOEL ROSENBLATT

Posted on 12/31/2004 12:34:53 PM PST by Grey Ghost II

Bank of America Corp., the third-largest U.S. bank, must pay $284 million to customers who were charged overdraft fees on accounts containing customer Social Security deposits, a judge ruled Thursday.

Bank of America has said it intends to appeal the decision, in which California Judge Anne Bouliane in San Francisco confirmed her tentative Dec. 8 ruling. In addition to the $284 million, the decision calls on the bank to give each affected customer $1,000. As many as 1.3 million customers may qualify, which could eventually increase the award to $1.6 billion, according to Mark Johnson, a lawyer for the customers.

"The decision confirms the jury's verdict that the bank's conduct was wrongful and provides for an ultimate remedy for victims," Johnson said.

The customers' attorneys argued Bank of America's actions violated California laws, citing a 1974 state Supreme Court case that prohibits banks from taking Social Security benefits to recover its own debts. The class-action case, filed more than five years ago, only applies to California customers, the bank has said.

Bank of America argued it couldn't stop charging the overdraft fees because the accounts at issue contain both Social Security and other funds. The order is "asking the bank to change its systems, to change its programs such that the fees won't be charged, but there's no way to tell what debits are allowed and which aren't allowed," Arne Wagner, a lawyer for Bank of America, has told the judge.

A Bank of America spokeswomen Shirley did not immediately return calls seeking comment.

The suit stems from complaints by one man, Paul Miller, who said the bank took bounced check fees from an account in which his Social Security benefits were automatically deposited.

The bank notifies customers in writing that such fees can be automatically deducted from their accounts. Bouliane ruled that customers weren't told the fees could be applied to their Social Security money.

Johnson said Thursday's order gives the Charlotte bank about 70 days to appeal the decision. Bank of America collects between $3 million and $4 million each month in bounced check fees from the accounts of California customers who have their monthly Social Security benefits electronically deposited, he said.

Bank of America has filed court papers seeking to decertify the class of 1.3 million customers, Johnson said. Suing as a class is less costly for the individual plaintiffs and gives them more leverage to negotiate a settlement.


TOPICS: Business/Economy; US: California
KEYWORDS: banking; boa; ruling
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The US should just give California to Mexico.
1 posted on 12/31/2004 12:34:53 PM PST by Grey Ghost II
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Comment #2 Removed by Moderator

To: Grey Ghost II

I have NO sympathy for BofA. I have a charge account thru them, and it took me a few months to realize that by clicking for payment to be made on the "due date" at its site, I was subjecting myself to a $39 late fee ... because, you see, if my "due date" fell on a day the bank was closed, like a Saturday, my payment was late. Seems to me that if their payments had to be made to coincide with bank hours, they could at least set the "due date" on a bank business day. But no, that way they wouldn't collect all those $39 fees.


3 posted on 12/31/2004 12:40:16 PM PST by EDINVA (a FReeper in PJ's beats a CBS anchor in a suit every time)
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To: valuesvaluesvalues
yup........not just out here but all over the country.. another attempt to use Calif as a punchline....boring. BofA is all over the west and don't ya think it gets tiresome after awhile to knock Calif just cause the word appears in a headline, like if things happen in other states like screwed up elections, hunters killing each other, factories exploding etc then that is just a coincidence but if it happens here then, oh it is California........pls....get real
4 posted on 12/31/2004 12:43:30 PM PST by NorCalRepub
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To: Grey Ghost II

This is a ridicoulous ruling. If the customer bounced a check, apparently there wasn't any Social Security money in the account.


5 posted on 12/31/2004 12:43:47 PM PST by Royal Wulff
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Comment #6 Removed by Moderator

To: EDINVA
Some of the other banks make a reasonable effort to tell you to reschedule your payment a couple days earlier. I just got one of those notifications.
7 posted on 12/31/2004 12:45:10 PM PST by steve86
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To: valuesvaluesvalues

Thanks for your reply..........there was an earlier post just like this......Calif is an awesome state except for the coastel politics....just cause something happens here has no bearing necessarily cause it is California. If no like gay marriages and that idiot mayor Newsome in SF, then go ahead, destroy him but it is not "California" per se that if you look at pure numbers in the millions there are still 15 million (not sure of correct figure) conservatives and more out here......more than the pop of most other states......


8 posted on 12/31/2004 12:50:02 PM PST by NorCalRepub
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To: EDINVA

No business could possibly operate without assuming that the majority if its customers had a minimum of common sense.


9 posted on 12/31/2004 12:50:12 PM PST by Sir Charles
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To: Sir Charles
No business could possibly operate without assuming that the majority if its customers had a minimum of common sense.

Viacom?

10 posted on 12/31/2004 12:52:08 PM PST by NativeNewYorker (Don't blame me. I voted for Sharpton.)
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To: EDINVA
I have NO sympathy for BofA.

Neither do I. Neither did my parents. Growing up, I can still remember my mother going on about the travesties of Bank of America. My fathers California business banked only with Security First National Bank and the later Security Pacific. They were the family's banking choices. Too bad BoA bought out Security Pacific in the late '80's. Now BoA and Well's Fargo fight over the lowest place in the banking gutter.

11 posted on 12/31/2004 12:52:15 PM PST by elbucko (Feral Republican)
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To: Sir Charles

"No business could possibly operate without assuming that the majority if its customers had a minimum of common sense."

I assume you're kidding. Many business operate on the assumption that their customers have no sense at all. Used car dealers, most stockbrokers, and every "health food" store, are just examples.


12 posted on 12/31/2004 12:53:10 PM PST by MineralMan (godless atheist)
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To: Grey Ghost II

"A Bank of America spokeswomen Shirley did not immediately return calls seeking comment."

And don't call her, surely!


13 posted on 12/31/2004 1:04:12 PM PST by jocon307
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To: Royal Wulff

Well .. my mom has a B of A account and she didn't bounce any checks.

She only gets SS and when she moved in with me we were changing accounts around and THE BANK allowed a check to be put through the old account even though it was already closed. They charged her an overdraft fee.

I hope this goes through - she deserves to have her money back - as well as the $1000 for all the trouble we had to go through to try to straighten it out .. we never got the overdraft fee back.


14 posted on 12/31/2004 1:04:30 PM PST by CyberAnt (Where are the dem supporters? - try the trash cans in back of the abortion clinics.)
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To: Grey Ghost II

Idiotic ruling.


15 posted on 12/31/2004 1:08:09 PM PST by JoeGar
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To: Grey Ghost II

Just out of curiosity, do you reside in the US? If so, would you like to say which state?


16 posted on 12/31/2004 1:08:49 PM PST by paul51 (11 September 2001 - Never forget)
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To: CyberAnt
Sounds to me like someone wrote a check against a closed account. Or, the account was closed with outstanding checks written against it. Whose fault was that?

I mean, come on, who is responsible for not spending more than there is in the account.

17 posted on 12/31/2004 1:27:48 PM PST by Royal Wulff
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To: Royal Wulff

No! We wrote a check against the new account and they applied it to the CLOSED ACCOUNT.

"who is responsible" ....???


18 posted on 12/31/2004 2:07:37 PM PST by CyberAnt (Where are the dem supporters? - try the trash cans in back of the abortion clinics.)
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To: CyberAnt

Oh man, my bad. Apologies.


19 posted on 12/31/2004 2:24:38 PM PST by Royal Wulff
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To: valuesvaluesvalues

Also they should really consider renaming it to 'Bank of India' with the way they're offshoring in droves.


20 posted on 12/31/2004 2:27:03 PM PST by G32
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