Bank of America Corp., the largest U.S. lender by assets, agreed to pay $410 million to settle lawsuits alleging deceptive practices in the management of customer accounts that led to excessive fees for overdrafts.

The settlement was dated Jan. 27, according to a court filing by Bank of America and lawyers for consumers. Overdraft class actions, unified in 2009 from across the country in Miami federal court, alleged breach of contract, unjust enrichment and usury by more than two dozen banks. Institutions including Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. were named in related lawsuits.

Miami resident Ralph Torres described in his suit against Bank of America how he opened an account in 2000 after seeing advertisements for “free checking.” Torres alleged he was tricked into believing he had more money in is account than was the case, and that Bank of America debited his funds in a way that made it more likely he would incur overdraft fees.

“The bank actively provides false or misleading balance information to these customers, including plaintiff, that in turn deceives these customers into making additional transactions that, in turn, will generate even more overdraft fees for the bank,” Torres’s lawyers wrote in the complaint.

Last year, the Federal Reserve imposed rules prohibiting lenders from automatically charging fees when consumers have insufficient funds for electronic or debit transactions. Last month, Bank of America introduced four new accounts where users pay fees unless they keep minimum balances, make regular deposits, use credit cards or take advantage of online services.

In his complaint, Torres said the bank mixed up the order and delayed the timing of debits and transactions to maximize the possibility customers will overdraft accounts.

“These ‘held-back transactions’ are not always reflected in customers’ available balance, thereby giving the customer the false impression that there is more money in his or her account than there actually is, and encouraging the customer to continue making transactions,” according to the complaint.

Bruce Rogow, an attorney for the customers, declined to comment. Christopher Tarbell, an attorney for the bank, didn’t return an e-mail seeking comment.

Anne Pace, a spokeswoman for Charlotte, North Carolina- based Bank of America, said the bank has already made changes to its overdraft policies, including the elimination of overdraft fees for debit card transactions and reduced fees for customers who overdraw their accounts.

Bank of America, with $633 billion in retail deposits as of September, has said overdraft, credit and debit-card fee limits may squeeze annual revenue by $4 billion starting this year.

The bank has said it expects to move all customers to the new accounts it announced in January starting in 2012.

In November, the Federal Deposit Insurance Corp. issued new rules requiring banks to warn customers who begin to accumulate hefty fees through an automated overdraft program. The rules, scheduled to become mandatory on July 1, will impose daily limits on overdraft fees charged to customers and ensure programs aren’t structured to maximize fees for banks.

(Source: Bloomberg)