Bank / Credit Union
Bank of America fined for more than $250M for fake accounts, junk fees
July 12, 2023
The Consumer Financial Protection Bureau has ordered Bank of America to pay more than $250 million in fines and customer refunds for a variety of violations including withholding credit card rewards, double-dipping on fees and opening accounts without consent, according to a USA Today report.
Bank of America, at one time, would charge customers $35 for non-sufficient funds, but the CFPB found the bank would generate multiple fees for the same transaction for substantial amounts.
The financial institution cut out non-sufficient funds in early 2022 and reduced overdraft fees from $35 to $10. It also offers an account that eliminates all overdraft fees. It claims this dropped overall overdraft fees by 90% in 2022 compared to 2021.
The CFPB said the bank withheld credit card rewards to tens of thousands of customers who applied for cards in person or via phone rather than online. In addition, the regulator claimed the bank's employees had illegally enrolled customers in credit card accounts without their consent for sales-based incentives, which caused both fees and harm to consumer's credit scores, according to the report.
The bank must pay $90 million to the bureau, $60 million to the Office of the Comptroller of the Currency and $80.4 million in consumer refunds. The bank already paid $23 million for customer's rewards.
The CFPB also ordered Wells Fargo to pay $2 billion in customers and $1.7 billion in penalties for similar deceptive sales practices in late 2022, according to an earlier report by USA Today. The bureau also fined U.S. Bank $37.5 million for illegally accessing credit reports and opening accounts in 2022.
