Bank of America fined $150 million for consumer abuses including fake accounts, bogus fees
On Tuesday, the Consumer Financial Protection Bureau said 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 CFPB said in a statement that the bank charged multiple $35 overdraft fees for the same transaction. It also failed to properly issue rewards to credit card users and signed up customers without their consent. Based in Charlotte, North Carolina, Bank of America was ordered to pay penalties totaling $150 million to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Additionally, it has to pay $80.4 million to customers who were unfairly charged bogus fees on top of the $23 million it already paid for 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. Tuesday’s announcement 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 punished Wells Fargo for a sales culture that created 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.