It be your own bank.
Bank of America will pay up big time after the company did some sketchy bank business.
BofA is forced to reimburse customers more than $100 million and pay $150 million in fines for “double-dipping” on overdraft fees, withholding reward bonuses on credit cards, and opening accounts without customer consent, the Associated Press reported.
The heavy payout is one of the highest financial penalties in years against the bank, which has spent the last 15 years trying to regain the trust of its customers by implying that the company’s focus is on financial health and not on overdraft fee income and financial trickery.
BofA has been ordered to refund $100 million to customers, pay $90 million in penalties to the Consumer Financial Protection Bureau, and $60 million to the Office of the Comptroller of the Currency.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra in a statement. “These practices are illegal and undermine customer trust.”
The move comes after there has been a push by the White House, Chopra, and the bureau to get rid of fees charged to customers that are deemed unnecessary or exploitative by banks, debt collectors, airlines, and concert venues, and are also known as “junk fees.” Banks such as BofA, JPMorgan Chase, Wells Fargo, and others have been a target for the bureau under the Biden administration, the outlet reported.
The bureau flagged BofA for “double-dipping” after charging customers $35 if they did not have enough funds in the bank to cover a transaction. In some cases, the business attempting to withdraw the funds would make another attempt, which would lead to another $35 non-sufficient funds fee by the bank.
The company stopped this practice last year. Instead of a $35 in-sufficient fund fee, customers are charged $15, which suggests the bank still has a long way to go before it ends its reliance on overdraft fee revenue.
Brian Moynihan, the bank’s CEO and chairman, told the AP last year that under the bank’s new policies, overdraft fee income was down 90% from the year before. The bank also said that it voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of last year.
The bank was also penalized for offering people cash rewards and bonus points when they signed up for a card, however, the CFPB said the bank illegally withheld promised credit card account bonuses.
Under the investigation, the agency also determined that since at least 2012, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without their knowledge or consent.
In 2014 the CFPB ordered BoA to pay $727 million for illegal credit card practices and in 2022, the bank was ordered to pay a $10 million civil penalty over unlawful garnishments.
Also, in 2022, the CFPB and OCC fined the bank $225 million and mandated the financial institution 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.
Crystal Gross
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