Bank of America has been ordered to pay over $100 million to its customers due to various infractions, including charging fees twice, withholding rewards, and opening unauthorized accounts. The Consumer Financial Protection Bureau (CFPB) announced on Tuesday that the bank would pay $90 million in penalties to its organization and an additional $60 million in penalties to the Office of the Comptroller of the Currency (OCC). The OCC found that the bank’s practice of charging fees twice for the same transaction was illegal. This scandal is reminiscent of the Wells Fargo scandal, where the bank had to pay hefty fines. Bank of America, headquartered in Charlotte, North Carolina, serves 68 million individual and small-business clients and holds $2.4 trillion in consolidated assets and $1.9 trillion in domestic deposits as of March 31, making it the second-largest bank in the US. The bank has not yet responded to requests for comment.
The CFPB discovered that Bank of America charged customers $35 when the bank declined a transaction due to insufficient funds. This penalty was applied multiple times for the same transaction, constituting double-dipping. Furthermore, the bank failed to deliver promised credit card account bonuses and rewards to its customers, which the CFPB deemed illegal. Additionally, since at least 2012, Bank of America employees secretly applied for and enrolled consumers in credit card accounts without their consent or knowledge, according to the CFPB.
CFPB Director Rohit Chopra stated, “Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent. These practices are illegal and undermine customer trust.” In 2014, the CFPB ordered Bank of America to pay $727 million for illegal credit card practices. Last year, the bank was fined $10 million for unlawful garnishments. Furthermore, in 2022, the CFPB and OCC fined Bank of America $225 million and required it to provide significant compensation to consumers for mishandling state unemployment benefits during the COVID-19 pandemic.
(Read more Bank of America stories.)
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