Financial Services Compliance Pressure | $2.25M Settlement Signals Stricter Fee Transparency Standards

The $2.25 million Bank of America settlement (Schertzer v. Bank of America, Case No. 3:19-cv-00264-DMS-MSB, Southern District of California) represents a critical regulatory inflection point for financial services compliance that directly impacts e-commerce sellers' payment processing infrastructure. Between May 2018 and November 2021, Bank of America charged customers duplicate out-of-network balance inquiry fees at FCTI-owned ATMs in 7-Eleven locations—a billing practice that violated contract terms and triggered class action litigation. Although Bank of America denied wrongdoing, the settlement demonstrates that courts and regulators are aggressively scrutinizing hidden fees and billing transparency, establishing precedent that will reshape how payment processors, fintech platforms, and merchant service providers structure their fee disclosures.

For e-commerce sellers, this settlement signals three critical compliance shifts: First, payment processors and merchant acquirers face heightened liability for opaque fee structures. Sellers using third-party payment gateways (Stripe, Square, PayPal, 2Checkout) must audit their fee disclosures to ensure they match advertised rates—duplicate or hidden charges now carry class action risk. The settlement's proportional distribution model (based on valid claims filed) suggests courts will favor broad class definitions, potentially affecting millions of sellers if similar fee practices are discovered in e-commerce payment processing. Second, the settlement establishes that financial institutions cannot rely on "denied wrongdoing" defenses when billing practices are demonstrably inconsistent with customer agreements. This precedent applies directly to marketplace payment holds, currency conversion fees, and cross-border transaction charges that sellers frequently dispute. Third, the 2026 claim deadline (June 29 for former customers, July 29 in some filings) and August 21 final approval hearing create a template for rapid settlement administration, suggesting future fintech settlements will move faster and affect seller operations more immediately.

The regulatory enforcement intensity is accelerating: This settlement follows the related Weiss v. FCTI settlement (2024), indicating that ATM fee practices are under sustained regulatory scrutiny. For sellers, this means payment processors will face pressure to simplify fee structures, reduce hidden charges, and provide real-time fee transparency. Sellers using merchant cash advances, high-risk payment processors, or international payment gateways should expect increased compliance audits and fee disclosure requirements. The settlement's administration by Kroll Settlement Administration (contact: 833-447-8321) demonstrates that settlement infrastructure is becoming standardized and efficient, enabling faster class action resolution and potentially lower legal barriers for future claims. Sellers should monitor their payment processor agreements for similar fee practices and prepare for potential fee restructuring as processors respond to regulatory pressure.