Bank of America Credit Line Protection Plan Enrollment Alleged to Violate TILA

This lawsuit alleges that Bank of America deceptively enrolled customers in and charged for insurance plan protection products without express and informed consent, in violation of the Truth in Lending Act.

Bank of America National Association (BANA), one of the world’s largest financial institutions, provides a range of banking, investing, asset management, and other financial and risk management products and services to individual consumers, small and middle market businesses, institutional investors, large corporations, and governments.

In 2006, South Carolina resident Jane Hughes and her husband opened a BANA line of credit in the amount of $120,000, secured by a mortgage on their Spartanburg County homestead.  On the date they signed the BANA Mortgage and accompanying disclosure agreement, BANA presented them with information about BANA' s optional Line Protection Plan (LPP).  The BANA LPP, offeing six protection options with monthly fees ranging in cost from 4.5% to 13.5% of the minimum monthly payment on the borrowers' credit line, was described as intended to provide optional protection on the variable portion of a credit line, for a monthly fee, by allowing the cancellation of all or some monthly loan payments in the event of disability, accidental death, or involuntary unemployment.  At the closing, Hughes and her husband signed a statement that they did not wish to purchase LPP by checking a box next to the "DECLINE to purchase any Protection on this Credit Line" option. 

Six years after Mr. Hughes’ death, on March 17, 2015, BANA sent a form cancellation to Jane and John Hughes informing them that the LPP would be cancelled on September 30, 2015 and, on March 30, 2015, a follow-up letter indicating that Mr. Hughes had selected an LPP.  Without the Hughes' knowledge, BANA had drafted a monthly charge of $28.40 from their account since August 2008.  Upon receipt of notice of Mr. Hughes death, BANA declined LPP coverage under the plan on the grounds that "[t]he death was the result of disease or treatment of disease or any medical treatment (and/or was not for the treatment of an accidental injury). " BANA refunded the payments drawn from the Hughes' account after Mr. Hughes’ death, but did not refund the payments drawn during his lifetime or provide proof or documentation that Mr. Hughes ever elected to purchase an LPP.

Mrs. Hughes' representative filed suit on November 16, 2015 (State of Carolina County of Spartanburg) alleging BNA breached its contract by enrolling John Hughes in an LPP without his express agreement and without having him sign a separate addendum electing such coverage, in violation of the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq.

The complaint seeks class action certification of BANA customers who, without the customer's express and informed written consent, were enrolled in and charged for a protection plan insurance product known as "Borrower's Protection Plan" and "Line Protection Plan."  The complaint charges BANA with fraud, fraudulent concealment, breach of contract and breach of contract accompanied by fraudulent acts and requests actual and punitive damages and attorney fees and costs.

Article Type: Lawsuit
Topic: Consumer
Tags: Credit Cards, Unauthorized Charges, Unfair Services, Unlawful Fees, Your Bank