Additionally, while Bank of America has generally reduced its reliance on junk fees, the bank is also strictly prohibited from charging repeat non-sufficient funds fees in the future. Stop its repeat offenses: Under the terms of today’s orders, Bank of America must stop opening unauthorized accounts, and the bank must disclose material limitations on any rewards cards bonuses and provide bonuses as advertised.The CFPB’s orders require Bank of America to: Bank of America also violated the Fair Credit Reporting Act by using or obtaining consumer reports without a permissible purpose in connection with unauthorized credit cards, as well as the Truth in Lending Act and its implementing Regulation Z, by issuing credit cards to consumers without their knowledge or consent. Bank of America’s practices violated the Act’s prohibition on unfair and deceptive acts or practices. Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws. In May 2022, the CFPB ordered Bank of America to pay a $10 million civil penalty over unlawful garnishments and, later in 2022, the CFPB and OCC fined Bank of America $225 million and required it to pay hundreds of millions of dollars in redress to consumers for botched disbursement of state unemployment benefits at the height of the COVID-19 pandemic. In 2014, the CFPB ordered Bank of America to pay $727 million in redress to its victims for illegal credit card practices. This is not the first enforcement action Bank of America has faced for illegal activity in its consumer business. Because of Bank of America’s actions, consumers were charged unjustified fees, suffered negative effects to their credit profiles, and had to spend time correcting errors. In those cases, Bank of America illegally used or obtained consumers’ credit reports, without their permission, to complete applications. Misused Sensitive Customer Information to Open Unauthorized Accounts: From at least 2012, in order to reach now disbanded sales-based incentive goals and evaluation criteria, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without consumers’ knowledge or authorization.The bank also denied sign-up bonuses to consumers due to the failure of Bank of America’s business processes and systems. The bank failed to honor rewards promises for consumers who submitted in-person or over-the-phone applications. Bank of America illegally withheld promised credit card account bonuses, such as cash rewards or bonus points, to tens of thousands of consumers.

Withheld cash and points rewards on credit cards: To compete with other credit card companies, Bank of America targeted individuals with special offers of cash and points when signing up for a credit card.

Over a period of multiple years, Bank of America generated substantial additional revenue by illegally charging multiple $35 fees. The CFPB’s investigation found that Bank of America double-dipped by allowing fees to be repeatedly charged for the same transaction.

Deployed a double-dipping scheme to harvest junk fees: Bank of America had a policy of charging customers $35 after the bank declined a transaction because the customer did not have enough funds in their account.

As of March 31, 2023, the bank had $2.4 trillion in consolidated assets and $1.9 trillion in domestic deposits, which makes it the second- largest bank in the United States.īank of America harmed hundreds of thousands of consumers over a period of several years and across multiple product lines and services.

The CFPB will be putting an end to these practices across the banking system.”īank of America (NYSE:BAC) is a global, systemically important bank serving 68 million people and small business clients, and has one of the largest coverages in consumer financial services in the country. “These practices are illegal and undermine customer trust. “Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra. Bank of America will pay a total of $90 million in penalties to the CFPB and $60 million in penalties to the OCC. The Office of the Comptroller of the Currency (OCC) also found that the bank’s double-dipping on fees was illegal. – Today, the Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay more than $100 million to customers for systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization.

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