Finance

Bank of America fined $150 million for consumer abuses including fake accounts, bogus fees

Products You May Like

In this article

A man walks past an automated teller machine (ATM) outside Bank of America Corp. headquarters in Charlotte, North Carolina, U.S., on Monday, May 2, 2016.
Chris Keane | Bloomberg | Getty Images

Bank of America, the second largest U.S. bank by assets, engaged in deceptive practices that hurt hundreds of thousands of its customers in recent years, the Consumer Financial Protection Bureau said Tuesday.

The bank charged multiple $35 overdraft fees for the same transaction, failed to properly issue rewards to credit card users, and signed up customers for card accounts without their consent, the CFPB said in a statement.

Charlotte, North Carolina-based Bank of America was ordered to pay a total of $150 million in penalties to the CFPB and another regulator, the Office of the Comptroller of the Currency. It also has to pay about $80.4 million to customers who were unfairly charged bogus fees, on top of the $23 million it already paid to customers who were improperly denied card awards.

“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in the release. “The CFPB will be putting an end to these practices across the banking system.”

Bank of America spokesman Bill Halldin said in a response the lender “voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022,” resulting in a 90% drop in revenue from those fees.

The announcement Tuesday is the latest sign that some of the practices exposed by the Wells Fargo fake accounts scandal in 2016 weren’t confined to that bank.

Regulators have punished Wells Fargo for a sales culture that led to the creation of 3.5 million fake accounts. But other lenders have had similar lapses, including U.S. Bank, which paid a $37.5 million fine last year for putting customers into unauthorized accounts.

Products You May Like

Articles You May Like

Number of older adults who lost $100,000 or more to fraud has tripled since 2020, FTC says
What travelers need to know about Spirit Airlines’ bankruptcy
Baidu posts 3% drop in third-quarter revenues, beating market expectations
SailGP signs Rolex as first title partner of its global sailing competition
Gen Z, millennial retail investors are tapping into ETFs, report finds. Here are things to watch out for, expert say

Leave a Reply

Your email address will not be published. Required fields are marked *