Bank of America agreed to part with a total of $250 million in fines and compensation Tuesday to settle claims it systematically double-charged customers fees, withheld promised credit card bonuses and opened fake accounts without customer authorization.
Reuters reports Bank of America agreed to pay $100 million in restitution to harmed consumers. A further $150 million in civil penalties will also be set aside after the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) said the bank violated a number of laws beginning in 2012.
Bank of America, based in Charlotte, North Carolina, serves 68 million people and small business clients. The bank had $2.4 trillion in consolidated assets and $1.9 trillion in domestic deposits as of March 31, making it the second-largest bank in the U.S.
The institution had a policy of charging customers $35 after the bank declined a transaction because the customer did not have enough funds in their account, the CFPB said in its official statement.
The penalties come after Bank of America was recently exposed for handing over a list to the FBI of anyone who used its services in the D.C. area during the events of January 6 – whether they were involved or not.
Bank of America also offered people cash rewards and bonus points when signing up for a card, but the CFPB said the bank illegally withheld promised credit card account bonuses.
Since at least 2012, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without their knowledge or authorization, the CFPB said.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra said in the prepared statement. “These practices are illegal and undermine customer trust.”
File/CEO and Chairman of the Bank of America Brian Moynihan speaks during the COP26 UN Climate Change Conference in Glasgow, Scotland on November 2, 2021. (HANNAH MCKAY/POOL/AFP via Getty Images)
In 2014 the CFPB ordered Bank of America to pay $727 million for illegal credit card practices, AP reports.
Last year it was ordered to pay a $10 million civil penalty over unlawful garnishments.
Also in 2022, the CFPB and OCC fined Bank of America $225 million and required it to pay hundreds of millions of dollars in redress to consumers for botched disbursement of state unemployment benefits at the height of the Chinese coronavirus pandemic, AP set out.