Bank of America's journey with its
overdraft fee class-action lawsuit
is coming to an end. Earlier this month, the bank began processing its “refunds” to customers who were affected by a debit processing priority policy that greatly benefited the bank at the expense of its customers. In short, a customer with $500 in the bank would be charged three overdraft fees in one day if a check was processed for $501 in addition to a debit card purchase of $5 and an ATM withdrawal of $20. The highest-to-lowest order was an arbitrary decision by the bank designed to maximize fees, regardless of the order the customer placed those debits.
This lawsuit, and
others affecting current and former Bank of America customers
, have been discussed at length at Consumerism Commentary.
After a number of lawsuits, Bank of America settled the case, and was ordered to pay the customers who were affected by this policy. Earlier this month, customers began receiving mysterious credits in their bank accounts. These credits were the result of the settlement agreement, but reflect a small portion of what each customer has paid to the bank in excessive overdraft fees.
The lawyers receive a large portion of the settlement proceeds
, leaving less for the consumers. Consumerism Commentary readers have reported receiving credits of less than a dollar, though some have received over a hundred dollars.
In order to receive the automatic credit, customers who are part of the class-action lawsuit must still be Bank of America customers. Those who have left the bank behind for whatever reason by
closing their Bank of America accounts
will receive their refund in the form of a check, sent through the mail to presumably the last known address. Because families move - in fact, moving from one town to another is a common reason for closing a bank account - many of these checks will not reach their destinations. Any unclaimed refunds go back to Bank of America, and the bank will be required to use those funds for pro-consumer projects.
Former Bank of America customers are now reporting to Consumerism Commentary that they are receiving these checks, all of which must be sent by November 30, 2012. The checks don't look like normal checks, further increasing the possibility that those who receive the checks do not cash them or deposit the money. The checks look like postcards, and they are designed to save money on postage. Saving money on postage is good because it means more is available for the customers, but it is creating a lot of confusion.
Note: If your address changed since your Bank of America account was closed, see the instructions at the bottom of this article.
- Many people receiving the postcard checks were unaware that they were part of a class-action lawsuit, so they are not expecting the money.
- People are often fearful of taking something that doesn't look like a legitimate check to a bank.
- Traditional mail is a dying delivery system - except for junk mail. Almost everything people receive through the postal service is junk, increasing the chances recipients will discard this postcard automatically, without scrutiny.
Thankfully, many people are researching this postcard check online and finding the discussion about the Bank of America lawsuit here on Consumerism Commentary. That frustration doesn't end there, however. Many recipients just can't deal with checks. The checks are drawn on an account at U.S. Bank, a national bank, customers are having difficulty getting them cashed.
- Some ATMs won't accept postcard checks, so you'll need t go into your bank branch to cash it or deposit the funds.
- Some bank tellers don't even realize that a check can come in this postcard form. Ask to speak to a supervisor if the cashier seems confused.
- Assuming the teller accepts the check as legitimate people living in a different Federal Reserve district than the one in which the check was issued have to deal with a waiting period before the funds are available.
- For refund recipients who don't have a bank account, cashing the check can be expensive. Having to pay a $3 fee for a $1.50 check doesn't make any sense, and someone in that situation might as well shred the check.
- Driving to the local bank branch might cost more in the use of gasoline than the value of the check.
These postcard checks are legitimate, even if they don't look like normal checks and if your particular cashier may not have seen one before. You could write a check on a piece of paper, and as long as you include some basic information, it's a legitimate check, and a bank is required to try to validate and cash it or deposit the funds. The postcard saves the bank money for postage and printing. I've received postcard checks for other settlements - I was not part of the Bank of America settlement class having never been a customer of Bank of America's checking account. I've received postcard checks also for rebates: I most recently purchased a ream of paper from Staples for $1 after rebate, and the rebate came in the form of a postcard check.