Bank of America penalized for fraudulent practices, including deceptive accounts and unauthorized fees

Bank of America







, the second-largest U.S. bank by assets, has been accused of engaging in deceptive practices that have negatively affected hundreds of thousands of its customers, according to a statement by the Consumer Financial Protection Bureau (CFPB) on Tuesday.

The bank allegedly charged multiple $35 overdraft fees for the same transaction, failed to properly distribute rewards to credit card users, and opened card accounts for customers without their consent, as stated by the CFPB.

As a result of these actions, Bank of America, based in Charlotte, North Carolina, has been ordered to pay $150 million in penalties to the CFPB and another regulatory body, the Office of the Comptroller of the Currency. Additionally, it must compensate customers who were unjustly charged fees with a total amount of approximately $80.4 million, in addition to the $23 million it has already paid to customers who were wrongly denied card rewards.

“These practices are illegal and erode customer trust,” stated CFPB Director Rohit Chopra. “The CFPB is committed to putting an end to such practices throughout the banking system.”

In response, Bank of America spokesman Bill Halldin claimed that the bank had voluntarily reduced overdraft fees and eliminated non-sufficient fund fees, resulting in a 90% decline in revenue from these fees during the first half of 2022.

This announcement marks another instance that suggests the fraudulent activities exposed in the Wells Fargo fake accounts scandal of 2016 were not isolated to that bank alone.

Wells Fargo has faced regulatory action for a sales-focused culture that led to the creation of 3.5 million fraudulent accounts. However, other financial institutions, including U.S. Bank, have also been found guilty of similar misconduct, as evidenced by the $37.5 million fine imposed on U.S. Bank last year for opening unauthorized accounts on behalf of unsuspecting customers.