Federal regulators announced on Tuesday (10) that they discovered Bank of America harmed customers by doubling fees, withholding credit card rewards, and opening fake accounts, in violation of several consumer financial protection laws.
As a result, the Consumer Financial Protection Bureau (CFPB) ordered Bank of America (BAC) to pay over $100 million to customers and $90 million in fines.
The bank is the second largest in the United States, serving 68 million individuals and small businesses.
Some of the allegations recall the Wells Fargo scandal, which opened millions of bank accounts without customer authorization.
The CFPB stated that Bank of America “harmed hundreds of thousands of consumers over a period of several years and across multiple lines of products and services.”
Among them, the CFPB found that the bank, which typically charged customers $35 if a transaction was declined due to insufficient funds, allowed these fees to be “charged repeatedly” for the same transaction, resulting in charges of “tens of millions” of dollars in fees on resubmitted transactions.
This occurred after an initial transaction was declined and the merchant resubmitted the charge to the customer’s account, which could still have insufficient funds to cover that expense. At that point, the customer would again be hit with a $35 insufficient funds fee.
“Customers had no way of knowing when or if a merchant would resubmit a transaction to the bank for payment and, therefore, could not avoid being charged multiple fees for the same transaction,” the agency said.
Additionally, to meet now-defunct sales-based incentive goals and boost their ratings, bank employees “illegally solicited and enrolled consumers in credit card accounts without the consumers’ knowledge or consent.” This involved using or obtaining consumers’ credit reports without their consent and resulted in unjustified fees being charged to customers.
Source: CNN