Bank of America Fined $250 Million Over Alleged Consumer Exploitation

Clear Facts:

• Bank of America is penalized $250 million by federal regulators for allegedly exploiting its customers through illegal practices.
• The bank is accused of double-dipping on fees, failing to deliver promised rewards, and misusing personal information to open unauthorized accounts.
• In addition to the penalties, the bank is ordered to pay over $100 million to the affected consumers and to cease these practices.

Federal regulators have imposed a staggering $250 million penalty on Bank of America for allegedly exploiting its customers.

The Consumer Financial Protection Bureau (CFPB) announced Tuesday that the bank is required to pay more than $100 million to impacted consumers and an additional $150 million in penalties to the CFPB and the Office of the Comptroller of the Currency (OCC).

Bank of America is accused of double-dipping on fees on customers with insufficient funds, denying reward bonuses promised to credit card customers, and misusing personal information to open unauthorized accounts.

CFPB director Rohit Chopra stated, “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”

Similarly, the OCC deemed the bank’s double-dipping practices illegal, resulting in a penalty of $150 million.

Bank of America allegedly imposed a $35 charge on customers for declined transactions due to insufficient funds and then repeated these charges for the same transactions, a process that went on for several years.

In addition to this, the bank is accused of falsely promising cash rewards and points to tens of thousands of customers and failing to fulfill these promises.

The penalties also account for an alleged scheme where Bank of America employees damaged customers’ credit scores for their benefit.

Employees reportedly used customers’ credit reports without consent to enroll in credit card accounts in order to meet incentive goals and satisfy evaluation criteria.

The affected customers “were charged unjustified fees, suffered negative effects to their credit profiles, and had to spend time correcting errors.”

Bank of America is no stranger to such accusations, having been previously fined $727 million in 2014 and $225 million in 2020 for other illegal practices.

The bank is now ordered to compensate victims of “unlawful non-sufficient fund fees” who have not yet received compensation from the bank, totaling an approximate $80.4 million in consumer redress.

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