(RightWing.org) – The second-largest US bank has been ordered to repay customers after it was caught charging unlawful junk fees. Bank of America had plundered customer accounts of over $100 million, double-dipping on fees and withholding reward payments. Now it has to pay it back, along with a hefty fine.
On July 10, the Consumer Financial Protection Bureau (CFPB) released a statement about enforcement action against Bank of America. The agency said the bank had been “systematically double-dipping” $35 fees charged to customers who had transactions declined for insufficient funds. It’s legal to charge customers for bounced transactions, but it isn’t legal to make multiple charges for the same transaction, and that’s what the bank was doing. CFPB director Rohit Chopra slammed it as an “illegal” process that damaged customer trust in the bank.
According to the CFPB, Bank of America also persuaded customers to sign up for credit cards by offering cash rewards and point schemes, then illegally withheld these incentives. On top of that, bank employees were given targets for the number of new credit cards they issued. To meet these targets, they harvested information from customer accounts, illegally obtained credit reports on them then signed them up for cards without their knowledge. Some of these customers then received unjustified fees and suffered damage to their credit records.
Now the CFPB has fined the bank $90 million in penalties, and the Office of the Comptroller of Currencies has added another $60 million fine on top. Bank of America has also been ordered to repay over $100 million to its wronged customers.
This isn’t the first time sharp practices have earned the bank a financial beating; in 2014, CFPB fined it $20 million and ordered it to repay $727 million after it was caught charging customers for card services they hadn’t received. It was fined again in 2022 for failing to properly distribute unemployment benefits during the COVID pandemic.
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