Court Ruling Hits Bank Of America
A California Superior Court judge has ruled that Bank of America violated California law when it unlawfully seized “direct deposit” Social Security funds from the accounts of retired and disabled customers to pay overdraft fees and misrepresented that it had the legal right to do so.
The lawsuit was brought by the plaintiffs under the state’s consumer protection laws, including Business & Professions Code section 17200, the “Unfair Competition Law”, a statute that has been under attack by business groups which are seeking to restrict its use through Proposition 64 on the November 2nd ballot. Contributors affiliated with Bank or America have been major donors to the Proposition 64 campaign.
The judge concurred with a jury’s findings that more than one million Bank of America retired and disabled customers are entitled to recover special damages of $1,000 each under California’s Consumer Legal Remedies Act, which prohibits false representations to such persons by businesses. She also added $206 million to the $75 million in general damages that the jury had awarded.
Evidence at trial revealed that the bank had unlawfully taken more than $284 million in overdraft charges over a five year period from the persons affected by the lawsuit. If the judge’s ruling stands, it could cost Bank of America more than $1.5 billion. The bank is expected to appeal.