In December 2016, New Economy Project filed a federal lawsuit against Bank of America, N.A., on behalf of George Campbell, a low-income, African-American New Yorker. The lawsuit alleged that Bank of America violated federal and state consumer protection laws by failing to properly investigate fraudulent, unauthorized activity on Mr. Campbell’s bank account. Mr. Campbell sought monetary and injunctive relief.
In 2015, on Christmas Eve, Mr. Campbell saw that his ATM card was missing from his wallet. He soon discovered that someone had carried out more than 20 unauthorized transactions on his bank account, draining nearly $4,000 of his savings. The unauthorized transactions included the deposit of fake checks bearing a signature with an exact resemblance to that of none other than former President Barack Obama. Incredibly, despite this and other clear signs of fraud, Bank of America denied Mr. Campbell’s repeated disputes and reported him to ChexSystems, a consumer reporting agency, for suspected fraud activity. (Mr. Campbell disputed this report with ChexSystems, and then added ChexSystems as a defendant when it failed to properly investigate his dispute and continued reporting him for suspected fraud activity.) As a result, Mr. Campbell had to turn to check cashers and prepaid cards, to which he lost hundreds of dollars more, in fees.
Mr. Campbell is not alone. Over the years, New Economy Project has heard from dozens of low-income New Yorkers—all people of color—whose repeated disputes of fraudulent, unauthorized activity on their bank accounts have been ignored by Bank of America and the other big banks, despite overwhelming evidence of fraud. By unreasonably denying their fraud claims and routinely reporting them to ChexSystems, the big banks have systematically shut out low-income people of color from the mainstream banking system, perpetuating economic inequality.
The lawsuit, which New Economy Project brought with co-counsel, Bromberg Law Office P.C., was filed in the U.S. District Court for the Southern District of New York, and settled in August 2017.