News

BofA facing Calif. lawsuit over ATM fees disclosure

February 12, 2004

LOS ANGELES - California consumers have filed a lawsuit claiming that Bank of America failed to adequately disclose certain fees at ATMs.

The suit, filed along with two others on Feb. 10 in Los Angeles County Superior Court, seeks certification as class actions representing customers throughout the state. Bank of America is also accused, along with Wells Fargo, of improperly collecting sales tax at the end of automobile leases.

According to a report in the Los Angeles Times,  the two suits regarding auto leasing demand unspecified damages for tens of thousands of Californians who have leased cars through the banks. The third seeks the return of ATM fees to potentially millions of Bank of America customers.

According to a suit filed by Pasadena lawyers Tina B. Nieves and Hector Gancedo, Bank of America ATMs display a notice saying "fee may apply" when customers order statements.

State law requires notice of the actual fees, which are $3 for a complete statement and $1 for an abbreviated version. The suit said the bank also charged customers of other banks undisclosed fees of $1.25 for account balance inquiries.

The two additional cases take aim at the sales taxes on the termination fees that banks charge at the end of auto leases, according to the Times.

California regulations require leasing companies to charge state and local sales tax on regular lease payments, the suits said, but not on costs "incurred in disposing of the leased property at expiration or earlier termination of the lease."

When Marc I. Lavin of Los Angeles turned in his leased Audi in October 2002, Wells Fargo charged him $20.63 in sales tax on top of the $250 termination fee, one suit says.

Bank of America also charged $20.63 in sales tax on top of a $250 termination fee when Michael Brown of Los Angeles returned his Chevrolet in July 2003, according to the other suit.

"One major question will be what happened to the money," said Andrew H. Selesnick of Encino, one of the lawyers who filed the suit. "Will they be able to show us they remitted it to the state or did they stick it in their pockets as profit?"

According to the Timesreport, Wells Fargo said it didn't comment on litigation. A spokeswoman for Bank of America said lawyers hadn't studied the suits enough to comment.