Bank of America fee Dilemma

Question

I am an Australian citizen.

Many years ago, whilst travelling on holiday to the US I signed up for a Bank of America e-banking account. It had no monthly fees and all was well. Every time I went on holiday I would deposit money into the US account and use it freely to pay merchants/businesses in the US.

Recently the bank abruptly removed its e-banking account and apparently migrated its e-banking customers to a core checking account with a $12 monthly fees if the account is less than $1500 US.

Are banks legally allowed to do this? In particular, no notice was provided on the upcoming monthly maintenance fee. I had not been sent any information via email or mail about the new account fees. It was only when I logged into the account and saw the fee automatically deducted from my account that I found out about it.

Secondly can the bank forcibly decide to charge these fees placing the account into the red/negative.

Answer 1

Just to add to the other answers, as of November 2022 the Online Banking Service Agreement of Bank of America explicitly covers this (emphasis mine):

D. Changes to Agreement

We may add, delete or change the terms of this Agreement at any time. We will inform you of changes when legally required [...]. We may communicate changes by either mail, email or a notice on our website and will make the updated terms available on our website. You agree that by continuing to use the Services after the date that changes are posted to our website, such changes will be effective for transactions made after that date, whether or not you access the website or otherwise receive actual notice of the changes.

So, at least according to BoA's Service Agreement, you are supposed to check the website daily to be aware of changes. Whether this is enforceable will depend on details and applicable consumer protection laws - however, if the notice is posted in an easily-accessible location and some time before becoming effective, it probably is.

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Note that this depends on jurisdiction. For example, in Germany until recently banks also were allowed to change the terms of agreements by simply notifying customers. However, in 2021 the German Federal Court of Justice (BGH) ruled that explicit consent by customers is required for new terms to become effective.

So German banks now require customers to click through the new terms online, or sign a paper document indicating they accept the new terms. If customers fail to do this, the bank may terminate their account according to the usual rules, but they may not change the terms unilaterally.

Answer 2

Was there a message posted in your online account, or on one of your statements, before the fees started? I'll bet there was. That was your notice.

Take a look at the Account Agreement or similar document that you were given when you opened the account. I'll bet it includes the following:

• The bank has the right to change the terms of the account, including fees, at any time, as long as they give you notice (see below). You would then have the option to close your account; if you don't, that constitutes acceptance of the new terms.

• Notice of account changes can be given by a message in your online account (which you'd have to log in to know about) or on your monthly statement (which you also have to log in to see). They don't have to be given by mail (particularly since you've opted for an "e-banking" account) nor by email (which banks typically say is too insecure).

Such terms are pretty common and I'm not aware that they have ever been found illegal. So if this is the case, then it would appear that the bank did what it promised, and legally it's your fault for not logging in to check your account more often.

Secondly can the bank forcibly decide to charge these fees placing the account into the red/negative.

Yes, the new terms would be that you agreed to have the fees deducted from your account, whether there's enough money there or not. If your balance is negative then you are now in debt to the bank, and they can do the usual things to try to collect - sending nasty letters, reporting the delinquency to a credit agency, and in principle, suing you.

Answer 3

Are banks legally allowed to do this? In particular, no notice was provided on the upcoming monthly maintenance fee. I had not been sent any information via email or mail about the new account fees. It was only when I logged into the account and saw the fee automatically deducted from my account that I found out about it.

Secondly can the bank forcibly decide to charge these fees placing the account into the red/negative.

A bank is usually allowed to do this, but usually has to give notice. Once you get notice, for example, by seeing your bank statement, however, you are bound by it.

You might be able to fight one round of a $12 charge. But after that, you're stuck, and it may not be cost-benefit effective to fight it from Australia. You could at least try calling their customer service line to ask that the account be closed and that the fee be refunded on a one time basis since you didn't receive any notice of it in advance.