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to think this is a crazy amount of money...

(2 Posts)
flyingspaghettimonster Wed 13-Jul-11 15:21:44

for a few lawyers? I received notice this week that Bank of America is subject to a class action lawsuit over their outrageous overdraft system. For a few years they have changed their system to always remove direct debits in order of amount rather than date of purchase, so if I had $400 in the bank and spent $200 of it in small transactions, then had a $300 bill scheduled a few days later, they charge the $300 first then in size order so that they can get the most in unauthorized overdraft fees... this obviously causes the most misery to those who live pay cheque to pay cheque and especially if those pay cheques aren't regular. I have spoken to the bank many times over this practice to complain, and they just say 'it is is common practice'.

Well, obviously I am overjoyed that somebody decided to fight this. Apparently Bank of America have been ordered to set aside $410 million to settle this. I know class settlements can earn lawyers millions if they win, so was interested to see what amount they would receive from the settlement fund. It states:-

Class Counsel intend to request up to 30 percent of the money remaining in the Settlement Fund, after costs and expenses are paid, for attorneys’ fees and costs. The fees awarded by the Court will be paid by out of the Settlement Fund. The Court will determine the amount of fees to award. Class Counsel will also request that up to $5,000 per Plaintiff, or $2,500 per Plaintiff for married couples in which both spouses are Plaintiffs, be paid from the Settlement Fund to the Class Representatives for their service as representatives on behalf of the whole Class.

Does that seem right? That on top of a 30% bonus (because all costs and fees are already paid out of the fund) they get $5,000 per person who receives anything back? Surely that would mean that the actual victims get nothing? I would expect the total amount of charges I was personally affected with is between $6-800... obviously nowhere near $5,000... so wouldn't my entire refunded fees be just handed to the lawyers? Or am I misunderstanding totally? It also says between 10-15% will be given to charity on behalf of people who don't get identified due to loss of data... obviously if it changes the bank's practices then that is great, but it would be nice if not every penny of refund were to go to the litigation team...

bedheadz Wed 13-Jul-11 18:28:03

Is the way UK banks work as well?

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