OAN Roy Francis
2:21 PM – Tuesday, July 11, 2023
Federal regulators found that Bank of America had deceived and harmed customers by double-dipping on fees, withholding credit card rewards and opening fake accounts.
On Tuesday, federal regulators laid out the violation by Bank of America stating that all of which are violations of various consumer financial protection laws.
The Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay more than $100 million to customers and $90 million in penalties for their violations. The Office of the Comptroller of the Currency (OCC) also ordered the bank to pay $60 million in fines.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” CFPB Director Rohit Chopra said. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
Part of the penalties come from an old Bank of America policy that charged customers $35 when the bank declined a transaction due to insufficient funds. The CFPB found that the bank had allowed the fee to be repeatedly charged for the same transaction, which allowed the bank to generate “substantial” additional revenue.
“The bank’s disclosures did not clearly explain that multiple fees could result from the same transaction,” the OCC said. “Additionally, customers had no ability to know when or if a merchant would resubmit a transaction to the bank for payment and therefore could not reasonably avoid the assessment of multiple fees for the same transaction.”
Bank of America was also found to have withheld credit card rewards from tens of thousands of consumers who had submitted applications in person or on the phone instead of online. The CFPB also said that the bank also had employees that illegally applied for and enrolled customers in credit card accounts without their knowledge to reach the old sales-based incentive goals.
Previously in 2014, the CFPB had also ordered Bank of America to pay $727 million for illegal credit card practices. In 2022, Bank of America was fined $225 million and had to pay hundreds of millions of dollars in redress for botched disbursement of state unemployment benefits. Also in 2022 the bank was order to pay a $10 million civil penalty over unlawful garnishments.
The CFPB stated that those who think they may have been affected by the violations of Bank of America do not need to take any actions. The responsibility will be on the bank to make the payments, which will be in the form of a direct deposit into customers’ accounts, or a check in the mail.
The CFPB also said that it will post a point of contact at Bank of America on its website sometime in July for anyone with further inquiries.
Bank of America is currently the second largest bank in the United States and serves 68 million customers and small businesses.
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