Bank of America – which seems to find itself in the middle of controversy more often than not – has been slammed with a $250 million fine.
According to the Consumer Financial Protection Bureau (CFPB), the bank harmed hundreds of thousands of customers by double-dipping on fees against customers that overdrew their bank accounts.
Customers are expected to get a $100 million refund and the banks have been ordered to pay $150 million in penalties to the CFPB.
The BOA has agreed to automatically refund those they took advantage of but wouldn’t say how much each customer gets.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
“Bank of America 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 a statement. “The CFPB’s investigation found that Bank of America double-dipped by allowing fees to be repeatedly charged for the same transaction. Over a period of multiple years, Bank of America generated substantial additional revenue by illegally charging multiple $35 fees.”
the group also found that BOA targeted people with special offers if they signed up for a credit card but never followed through with the rewards.
“From at least 2012, in order to reach now disbanded sales-based incentive goals and evaluation criteria, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without consumers’ knowledge or authorization,” the CFPB said. “In those cases, Bank of America illegally used or obtained consumers’ credit reports, without their permission, to complete applications. Because of Bank of America’s actions, consumers were charged unjustified fees, suffered negative effects to their credit profiles, and had to spend time correcting errors.”
The entire scheme is similar to the Wells Fargo debacle.
