One of the largest banks in the US has agreed to pay a $250 million fine for imposing a series of illegal practices against its customers.
According to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC), Bank of America charged hidden fees, withheld credit card rewards and opened fake accounts for multiple years.
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.”
The bank is paying $100 million directly to account holders who were affected by the bank’s illegal practices, and is paying an additional $90 million in penalties to the CFPB and $60 million in penalties to the OCC.
CFPB Director Rohit Chopra says the agency’s mission is to rid the banking sector of systemic and rampant illegal practices against customers.
“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.”
This is far from first time Bank of America has been fined for engaging in illegal activity in its consumer business.
The CFPB ordered Bank of America to pay $727 million to victim of illegal credit card practices back in 2014.
The same agency ordered the bank to pay a $10 million civil penalty over unlawful garnishments in 2015.
And in 2022, the CFPB and OCC fined Bank of America $225 million for “botched” disbursement of state unemployment benefits two years prior.
The fines levied against Bank of America pale in comparison to the firm’s profit.
According to Statista, the bank’s annual gross profit in 2022 was $94.95 billion, a 6.55% increase from 2021.
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