PHILADELPHIA (CN) – Bank of America cheated small businesses of millions by charging higher interest on credit lines than permitted by contract, a class action claims in Federal Court. Plaintiffs say BofA began cheating after it bought Fleet Bank in September 2004.
The lead plaintiff says its contract limited BofA to charging no more than 4.5% over the prime rate, with a 0.25% deduction for autopay.
It claims that after BofA bought Fleet Bank, it jacked up its interest rate to 14.5%, though the prime rate never exceeded 8.25% during the period.
It claims that when it protested, BofA said it had to pay off the credit line immediately or keep paying the unfair rate.
Lead plaintiffs Stanley Brody and Stan Brody Supply are represented by Stuart Eisenberg of Warminister, Pa.