The only thing worse than having your bank hand over your money to your creditors is having that bank take away your ability to do anything about. And the only thing worse than that is to then be charged for having your money taken against your will. And the only thing worse than that is if the bank did all three of those things in defiance of the law. Which, the Consumer Financial Protection Bureau says, is exactly what Bank of America did.
The bureau, which brought the case against the bank, said Bank of America had forced the customers to agree to contracts that limited their ability to fight the creditors’ actions. In 3,700 cases, the bureau said, Bank of America also made customers pay a total of just under $600,000 in “garnishment fees” for processing their creditors’ fund-extraction requests….
In some states, it is illegal to take so much money to fulfill a court-ordered payment obligation that the debtor is left with nothing to live on…. The consumer bureau said Bank of America failed to apply the correct restrictions to some of its customers and incorrectly told the customers that the location of the court issuing the collection order mattered the most.
For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.