In order to resolve allegations that it routinely double-charged customers’ fees, withheld promised credit card bonuses, and started fictitious accounts without consumers’ consent, Bank of America this week consented to pay a total of $250 million in penalties and restitution.
Reuters states Bank of America consented to provide injured customers with $100 million in compensation. When the Consumer Financial Protection Bureau (CFPB) along with the Offices of the Comptrollers of the Currency (OCC) determined that the bank broke many regulations starting in 2012, an additional $150 million in civil fines would also be set aside.
68 million individuals and small businesses are served by Bank of America, which has its headquarters in Charlotte, North Carolina. The bank was the second-largest financial institution in the United States as of March 31 with consolidated assets of $2.4 trillion and domestic deposits of $1.9 trillion.
According to the CFPB’s formal statement, the institution maintained a policy of charging clients $35 when the bank rejected a transaction simply because the customer’s account was insufficiently funded.
The fines follow recent revelations that Bank of America sent the FBI a list of everyone who utilized its services in the Washington, D.C., region on January 6—whether they’d been implicated or not.
The agency also came to the conclusion that the bank engaged in double-dipping by enabling fees to be applied several times to the same transaction.
The bank said that in the first half of the past year, it voluntarily cut overdraft costs and completely abolished all non-sufficient fund fees.
When someone applied for a card, Bank of America additionally offered cash prizes and bonus points, according to the CFPB, but the bank allegedly improperly withheld the promised benefits for credit card accounts.
Employees at Bank of America have allegedly opened credit card accounts for customers without their knowledge or consent since at least 2012, according to the Consumer Financial Protection Bureau.
“Bank of America wrongfully retained credit card rewards, double-dipped on the fees, and created accounts with no consent,” CFPB Director Rohit Chopra stated in the prepared statement. “These actions violate the law and damage consumer confidence.”
According to the AP, the CFPB demanded Bank of America to shell out $727 million in 2014 for using fraudulent credit card operations.
It was penalized with a $10 million civil fine last year for unauthorized garnishments.
A bungled distribution of state unemployment payments at the peak of the Chinese coronavirus outbreak resulted in a $225 million penalty along with hundreds of millions of dollars in customer compensation for Bank of America, according to the AP. This occurred in 2022.