Bank of America settles class action alleging useless credit protection service

Bank of America customers won preliminary court approval of a $20 million settlement over claims the bank signed up and charged credit card customers for a useless credit protection service.

Credit card customers had filed a class action accusing the bank of signing them for its Credit Protection Plus service without their permission or through deceptive marketing and giving them nothing meaningful in return for the monthly fees they were charged.

Bank of America admitted no wrongdoing in the proposed settlement, but agreed to wind down the service.

In the meantime, the bank agreed to waive or eliminate several restrictions it had imposed before enrollees could receive benefits, including employer verification of involuntary unemployment or disability and waiting periods before the service’s benefits kicks in.

The $20 million will be put into a fund administered by lawyers who brought the action.

Customers who say they were enrolled in the program without their consent or through deceptive advertising will be eligible for up to $50 from the fund, while those who say they were denied the benefits they expected can get up to $100.

Customers will have until February 26, 2013, to submit claim forms to receive a distribution from the fund.

The proposed settlement, which was preliminarily approved by U.S. District Judge Thelton Henderson in San Francisco, limits attorneys’ fees to $6.6 million.

The final settlement approval hearing is scheduled for January 14, 2013.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.


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