Bank of America does not adjust automatic payments on credit cards when customers pay off their statement balance in the middle of a billing cycle and ends up charging them a second time, despite there being no outstanding balance, according to a proposed class action filed Tuesday in Illinois federal court.

In an 18-page complaint, Bank of America credit cardholder Nicholas Sdoucos accused the defendant of violating consumer protection and debt collection laws of North Carolina and unjustly enriching itself through a "confusing and misleading" automatic payment system that withdraws from consumers' deposit accounts a second time, even after they already paid off their statement balances for that month.

Bank of America customers have two options when setting up automatic payments to avoid interest or fees: a total minimum payment due, or a statement balance. Sdoucos alleged he picked to automatically pay off his "statement balance" each month, which he believed meant it would fully pay off his statement balance.

That means cardholders would anticipate that they would not be billed for the full statement balance again if they make a one-time payment in the middle of the billing cycle to pay their statement balance, either in whole or in part, before the automatic payment is due, Sdoucos pointed out.

"After all, no 'statement balance' would remain to be paid off," the suit said. "Yet Bank of America does just that. If a cardholder like Plaintiff pays all or part of their statement balance mid-cycle, Bank of America does not adjust its automatic payment to account for the earlier payment. Instead, it simply double-dips, re-billing the cardholder for the amount they already paid."

In 2017, Sdoucos signed up for a Bank of America Unlimited Cash Rewards World Mastercard and linked it to his personal deposit account at Charles Schwab. Sdoucos said he set up autopay for the full balance owed, or the "statement balance," so that the credit card would always be paid in full each month with no balance remaining.

According to the defendant, "statement balance" means the "new balance total" as reflected on customers' credit card statements, and this option allows them to pay their statement in full.

The plaintiff argued he reasonably believed choosing the "statement balance" option meant Bank of America would only deduct amounts equal to the total balance still owed on his card, and that if he paid off the statement balance before the automatic payment was due, he would not be billed again.

Sdoucos' statement from Sept. 14 to Oct. 13 reflected an amount of $3,044.88 that he spent with his Bank of America card, according to the suit. Sdoucos chose to pay $1,000 on the statement, which left a balance of $2,044.88 on Oct. 13.

Sdoucos explained he chose to pay the balance on the card sooner rather than wait for the autopayment debit, since his Charles Schwab account had the funds. Then, on Oct. 21 — about three weeks before the payment due date — he logged onto his Bank of America account and manually submitted a payment for $2,044.88, which was the total balance due on his credit card, the suit said.

That meant his billing statement should have reflected a $0 balance either on or before Oct. 23, which is 18 days before the payment due date, Sdoucos said. After making his $2,044.88 manual payment on Oct. 21, there was no balance reflected on his credit card account.

However, when he logged onto his Bank of America account on Sunday, Sdoucos said he saw a payment amount of $2,044.88 that was scheduled to automatically leave his Charles Schwab deposit account on Nov. 10, even though he did not owe the bank any money as of Oct. 21.

Bank of America essentially took double of what Sdoucos owed on his statement balance, even though the balance had already been reduced to $0, the suit said.

"When pressed as to why Bank of America was attempting to debit funds despite a zero balance on the account, Bank of America's representative explained that it recently implemented new software which was not recognizing manual payments and that she had been fielding calls from many Bank of America customers who were experiencing the same issue as the plaintiff," the suit said.

Sdoucos asked if he could turn off his auto debit, which was scheduled to make a payment on Nov. 10, according to the complaint. However, the representative said there was nothing he could do to block the double payment from his Charles Schwab deposit account and that he would have to wait for the money to be withdrawn before seeking a refund.

"He had no guarantee that the money would be refunded," the suit said.

Bank of America's competitors do not do this when their cardholders set up automatic payment on their cards, Sdoucos alleged.

Capital One, for instance, will reduce the automatic payment amount for customers if they make other payments between the statement issuance date and the day before payment is scheduled, Sdoucos pointed out.

Capital One also gives customers the option to either keep or cancel their scheduled autopay if they have already made a payment during the billing cycle.

Chase Bank will not debit a customer's account if they have a $0 balance at the time automatic payment is scheduled, and also adjusts its autopay methods to account for payment activities that occurred between the statement and payment dates, Sdoucos argued.

Citibank and Wells Fargo also use autopay features that account for payments made between the statement and payment dates when calculating and charging the automatic payment, Sdoucos alleged.

"Bank of America's practice of double-debiting customer accounts the amount of the statement balance after they have already paid all or part of the amount is deceptive, unfair, and out of step with industry norms," the complaint said. "Consumers have no way to anticipate that Bank of America will continue to bill them after they've paid off their statement, and no way to prevent this overbilling, because Bank of America does not warn them of its practice until it has already taken their money."

Sdoucos brings his complaint on behalf of a proposed class of similarly-situated Bank of America customers who had a credit card with the defendant, set up autopay through its website, chose the "Statement Balance" option to pay off their statement in full and made a payment in the middle of the billing cycle, and was charged again for the full new balance total.

The suit asserts causes of action under the North Carolina Unfair and Deceptive Trade Practices Act, the North Carolina Debt Collection Act, unjust enrichment and breach of the implied covenant of good faith and fair dealing.

Sdoucos wants the court to certify the proposed class, appoint him as class representative and his attorneys as class counsel, and to order Bank of America to pay the customers statutory and punitive damages, attorney fees and costs.

Representatives for Sdoucos and the defendant did not immediately respond to inquiries seeking comment Thursday.

Sdoucos is represented by Hassan A. Zavareei, Katherine M. Aizpuru, and F. Peter Silva of Tycko & Zavareei LLP, and Shaun Spector of The Law Offices of Shaun Spector PLLC.

Counsel information for Bank of America was not immediately available.

The case is Nicholas Sdoucos v. Bank of America N.A., case number 1:25-cv-13845, in the U.S. District Court for the Northern District of Illinois.