You knew banks had you over a barrel with overdraft fees. Now it is time to rejoice. A giant will have to pay for their misdeeds.

A recent class action heard in California Superior Court based on “allegations of misconduct relating in part to its assessment of certain fees in relation to debit card transactions” will result in a settlement payment by Bank of America. The Settlement Fund will receive $35 million from the banking giant, to be divided amongst members of the action.

The lawsuit claims BofA “encouraged its customers to use Bank of America debit cards and increased the number of fees charged to customers using Bank of America debit cards through the order in which such transactions are posted and the account balance information it provides.”

Unconscionable

The lawsuit also claims that Bank of America “authorizes debit card transactions that will result in overdraft fees; fails to warn customers that specific debit card transactions may result in overdrawn accounts; posts debit card and other transactions in high-to-low order; and provides account balance information to customers that is not current, accurate or as advertised.” In addition, the lawsuit claims that Bank of America’s customer agreements are “unconscionable, and that Bank of America does not provide customers with copies of account agreements until after they open their accounts.”

Payday loans include much less hassle.

Bank of America denies these claims and contends that its actions have been in accordance with state and federal laws and its customer agreements. Even though BofA admits no wrongdoing in the settlement, it is clear outside the rigid constraints of court that they’re guilty.

Other banks in on the skullduggery

According to the settlement record, customers of Fleet Bank, LaSalle Bank, LaSalle Bank Midwest, and U.S. Trust Company may also be Settlement Class Members. For additional information on the settlement and if you think you may be entitled to join the Settlement Class, use the link to the Class Action Web site found above.

Related Videos:

When you go to a payday loan company and take out a loan, it is expected that you will repay that loan within the agreed time period. Typically, this period is two weeks. If you do not repay within the allotted time period and also fail to repay your loan with an installment plan as some lenders offer, it is reasonable and within the legal rights of pay day loans companies to attempt to collect outstanding debt.

Apparently, Federal Way in Washington State thinks that we should instead live in a financial Never Never Land where borrowers do not have to be “burdened” by the responsibility of repaying their debts. Owen Lei of KING 5 TV News in Seattle reports (http://www.king5.com/localnews/stories/NW_021809WAB-fast-cash-suit-KC.2d9ffad9.html) that the Federal Way lender Fast Cash Loans will pay $2.5 million in court settlement with former clients who sued because they want to fly kites rather than be adults and pay their debts.

But isn’t the lender being defrauded by negligent borrowers?

Customers involved in the class action against Fast Cash Loans claim that voicemails left by representatives of the company were defamatory. Moreover, they object to said representatives presenting themselves as “fraud investigators,” according to Lei. How is that inaccurate? Hasn’t Fast Cash Loans been defrauded by customers who don’t pay?

Pacific Financial Holding, the parent company for Fast Cash Loans, will pay $2.5 million to end the negative publicity, although they maintain there has been any wrongdoing on their part. They will continue to offer payday loans.

Legitimate means, legitimate ends

“I guess everybody’s reaction when they listen to them is outrage, when you listen to someone being so… arrogant, I believe is the word, about their abuse,” said Michael Kinkley, an attorney for the plaintiffs. Mr. Kinkley, you’re wrong. People who are fed up with people expecting bailouts when they have been irresponsible are NOT outraged. They’re outraged at enabling mouthpieces like you who profit from the breakdown of personal responsibility in western society.

Payday loan companies are legitimate businesses. As legitimate businesses, they are entitled to protect themselves from being defrauded in any legitimate means at their disposal. As long as illegitimate lawsuits of this nature are allowed into the court systems, lawyers will profit and small businesses will lose.

Payday loans should work for all. But a recent press release from Advance America today announced that they have settled a class action lawsuit in Georgia that resolves all claims against them in connection with any payday loan transactions in that state. Operations in Georgia had been suspended in 2004, to their detriment.

Tom Newell, the company’s VP of Legal and Regulatory Affairs, said this regarding the settlement:

We will continue to aggressively defend our products and services against these types of claims. However, a settlement like this one makes good business sense and brings value to our stakeholders by assuring certainty of outcome and eliminating continuing legal costs in a geographic market where we no longer conduct business. We are pleased to have reached a favorable result.

New Hampshire stealing legitimate jobs from taxpayers

Heading north, Advance America also announced the closure of its 24 New Hampshire stores. This decision comes after January 1, 2009 legislation took away consumer choice by effectively banning cash advance in that state. President and CEO Ken Compton pointed out that the 36 percent APR cap imposed on New Hampshire stores was devastating and unnecessary. Furthermore…

…Eliminating the payday loan product as an option does not eliminate the need for short-term credit in New Hampshire, it simply eliminates a sensible financial choice for thousands of hardworking people, and forces them into higher cost alternatives such as fees for bounced checks or late payments and other risky loans. We are disappointed that a majority of legislators and Governor Lynch chose to take away a viable, regulated short-term credit option from New Hampshire residents and put hundreds of employees out of work, particularly during a period of broad economic instability.

Payday loans are a choice people need

Outside of the closing costs such actions require, there are the inevitable jobs that are lost. How can New Hampshire legislators justify delivering such a devastating blows to families during a recession of this magnitude? For that matter, how could Georgia legislators in 2004? Simple. They don’t care about the individuals who scrape and claw to make a living, far outside the locked gates of their no-doubt palatial homes. The anti-faxless payday loan lobby may have just given them more money, which is normal politics in and of itself. However, they should care more about people retaining jobs in what has proven time and again to be a legitimate consumer finance field. Payday loans are a legitimate business and an emergency cash bridge for many consumers.

Related articles

• Payday loan company can settle class-action lawsuit (ctv.ca)
• The Cash Store Financial Services Inc. announces class action lawsuit settlement (newswire.ca)