A major US bank has been fined $250 million for engaging in illegal practices against its customers.
The Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) found that Bank of America imposed hidden fees, withheld credit card rewards, and opened fraudulent accounts over a period of several years.
Fining of this bank
Specifically, the bank is being fined for “systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization.”
Account holders affected by the bank’s illegal practices will receive a direct payment of $100 million, while the bank will pay $90 million in penalties to the CFPB and $60 million in penalties to the OCC.
CFPB Director Rohit Chopra has stated that the agency’s goal is to eliminate systemic and widespread illegal practices against customers in the banking industry.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent.
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 has a history of engaging in illegal activity in its consumer business, resulting in multiple fines. In 2014, the CFPB ordered the bank to pay $727 million to victims of illegal credit card practices.
The same agency ordered a $10 million civil penalty in 2015 for unlawful garnishments. In 2022, the CFPB and OCC fined Bank of America $225 million for mishandling the disbursement of state unemployment benefits two years prior.
Bank of America’s profit far outweighs the fines imposed upon them. Statista reports that in 2022, the bank earned a gross profit of $94.95 billion, which is a 6.55% increase from the previous year.
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