Bank of America was penalised for unauthorised accounts and excessive fees
“Bank of America” has been directed to pay $150 million in penalties after it was discovered that the bank had opened credit card accounts without customers’ consent. Additionally, regulators found that the bank had imposed unjustified fees and failed to provide promised reward bonuses, affecting hundreds of thousands of customers dating back to 2012.
Bank of America has neither accepted nor denied the findings of the investigation. As part of the penalty, the bank has been instructed to refund customers and pay the “Consumer Financial Protection Bureau (CFPB)” and Office of the “Comptroller of the Currency (OCC)” a total of $150 million in fines.
The CFPB estimates that customer refunds will exceed $80 million. The bank was found to have applied for and enrolled consumers in credit card accounts without their knowledge or authorization to meet sales incentive targets, resulting in unwarranted fees and negative impacts on customers’ credit profiles. Bank of America is also accused of charging multiple fees for the same transaction when customers had insufficient funds, leading to $35 fees being charged repeatedly.
The bank has since discontinued charging the $35 insufficient funds fee and reduced overdraft fees. In January 2023, the bank eliminated sales goals for its credit card staff and agreed to maintain this change for at least three years. The penalties imposed on Bank of America are part of President Joe Biden’s commitment to addressing excessive fees imposed by various industries.
The White House’s efforts, supported by the CFPB, have resulted in significant annual savings for the public. Bank of America’s revenue from overdraft and non-sufficient fund fees has decreased substantially as a result of changes made in 2022. The bank has previously faced fines and penalties for deceptive marketing, illegal charges, and mishandling unemployment benefit distributions.
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