Banking giant to pay customers over $100 million for deceiving own customers
By Jason Cohen
Daily Caller News Foundation
The Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay customers over $100 million for unlawfully charging junk fees to customers among other misconduct, according to a CFPB press release on Tuesday.
The second-largest bank in the U.S. “systematically double-dipp[ed] on fees imposed on customers with insufficient funds in their account, withh[eld] reward bonuses explicitly promised to credit card customers, and misappropriat[ed] sensitive personal information to open accounts without customer knowledge or authorization,” according to the CFPB. Additionally, Bank of America will pay $150 million in fines to the CFPB and the Office of the Comptroller of the Currency.
The banking giant enforced a policy that charged customers $35 following a transaction decline due to insufficient account funds, and then illegally “double-dipped by allowing fees to be repeatedly charged for the same transaction,” according to the CFPB. Bank of America reportedly garnered significantly more revenue through this “scheme” of charging customers $35 fees multiple times.
“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in the agency’s press release. “The CFPB will be putting an end to these practices across the banking system.”
Today, the CFPB ordered @BankofAmerica to pay more than $100 million to harmed customers for double-dipping on fees, wrongfully withholding credit card rewards, and opening accounts without consent. https://t.co/Ky44sKYADf
— consumerfinance.gov (@CFPB) July 11, 2023
Bank of America serves 68 million individuals and small business clients, and had $2.4 trillion in assets and nearly $2 trillion in domestic deposits as of March 31, according to the CFPB. The massive bank “harmed hundreds of thousands of consumers over a period of several years and across multiple product lines and services,” the agency wrote.
The bank unlawfully retained cash and points bonuses it promised to tens of thousands of customers when enrolling for a credit card, according to the CFPB. Additionally, bank employees unlawfully signed customers up for credit card accounts without their consent, leading to charges of unwarranted fees and damage to their credit.
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“We voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022,” a Bank of America spokesperson told the Daily Caller News Foundation “As a result of these industry leading changes, revenue from these fees has dropped more than 90 percent.”
This story originally was published by the Daily Caller News Foundation.
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