Business news

  • Follow Business

Bank of America settlement OK’d

MIAMI — A federal judge on Monday gave final approval to a $410 million settlement in a class-action lawsuit affecting more than 13 million Bank of America customers who had debit card overdrafts during the past decade.

Senior U.S. District Judge James Lawrence King said the agreement was fair and reasonable, though it drew criticism from some customers because they would only receive a fraction of what they paid in overdraft fees. The fees were usually $35 per occurrence.

“It’s really undisputed that this is one of the largest settlements ever in a consumer case,” said Aaron Podhurst, a lead attorney for the customer class.

Bank attorney Laurence Hutt said 13.2 million Bank of America customers who had debit cards between January 2001 and May 2011 would get some payment. No one will have to take any action or fill out paperwork.

Barry Himmelstein, an attorney for customers who objected to the deal, said he calculated that the bank raked in $4.5 billion through the overdraft fees and was repaying less than 10 percent. He said the average customer in the case had $300 in overdraft fees, making them eligible for a $27 award from the lawsuit.

The lawsuit claimed Bank of America processed its debit card transactions in the order of highest to lowest dollar amount so it could maximize the overdraft fees customers paid.

Despite the deal, Bank of America insists there was nothing improper about the processing sequence.

Judge halts graphic cigarette warnings

WASHINGTON — A federal judge has blocked the government from requiring tobacco companies to begin placing images of diseased lungs and cadavers on cigarette packages, saying they violate the firms’ First Amendment rights.

U.S. District Judge Richard Leon granted the preliminary injunction Mon­day because he believed there was a “substantial likelihood” the companies ultimately will win “on the merits of their position that these mandatory graphic images unconstitutionally compel speech.”

He said the images went beyond “purely factual and uncontroversial information” and ventured into advocacy.

The FDA rule, authorized by Congress in 2009 and scheduled to go into effect in September, now is likely to be embroiled in a legal dispute for months or years. The images include an infant in an incubator, a man breathing through a respirator and a man breathing through a hole in his throat.


Search Augusta jobs