Bank of America ordered to pay $250 mn for consumer violations
Regulators ordered $250 mn in fines and restitution from Bank of America over violations of banking consumers
New York – US regulators ordered Bank of America to pay $250 million in fines and restitution for unfair fees and other banking violations that harmed consumers, authorities said Tuesday.
Bank of America “double-dipped” on fees on customers for holding insufficient funds, repeatedly charging them a $35 penalty for the same transaction, said the Consumer Financial Protection Bureau.
The US bank also withheld promised cash and points to consumers who signed up for credit cards, the CFPB said.
In a third violation listed by the agency, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without the consumer’s knowledge; these actions were tied to “now disbanded sales-based incentive goals and evaluation criteria,” the CFPB said.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra.
“These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
Under the orders, Bank of America will pay $90 million in penalties to the CFPB, $60 million in fines to the Office of the Comptroller of the Currency and $100 million in customer restitution.
Bank of America eliminated non-sufficient fund fees in the first half of 2022 and reduced overdraft fees from $35 to $10.
As a result of these changes, Bank of America saw a more than 90 percent drop in revenue from these fees, said an email from a Bank of America spokesperson that did not address the other issues in the enforcement.