BofA won’t pay $1 billion to the customers who sued the bank

According to California's highest court decision, Bank of America Corp need not pay $1 billion or more to its customers. Earlier they in the class-action case claimed that the bank illegally used money from their Social Security direct deposit accounts between 1994 and 2003 to collect fees for overdrafts and other debts.

In 2004 A San Francisco trial court and in 1974 the California Supreme Court in similar cases decided in favor of banks’ customers ordering the banks to pay damages. 

The current case was distinguished from previous ones by the number of accounts involved in the issue. As court said the transactions occurred "within a single account" rather than in multiple accounts. Also it added that in this case there were not present policy concerns about setting off independent debt, such as the importance of providing people "with a stream of income to defray the cost of their subsistence.”

"We do not agree with plaintiffs that there is no meaningful difference between satisfying a debt external to an account and recouping an overdraft of an account from funds later deposited into that same account," Justice Carlos Moreno wrote for the court.

Monday’s ruling also upheld 2006 appeals court decision. It had reversed the trial court ruling.
As lawyer for the bank customers, James Sturdevant, stated, Monday’s decision was "disgraceful."

As said BofA, it was very pleased with the ruling, which rejected "a challenge to account balancing practices followed by every bank in California and across the nation."