(CTN News) – A report released Tuesday by the Consumer Financial Protection Bureau revealed that Bank of America, the second-largest bank by assets in the United States, engaged in deceptive practices which made hundreds of thousands of customers suffer in recent years.
In a statement, the Bank Of America Consumer Financial Protection Bureau said the bank charged multiple $35 overdraft fees for the same transaction, failed to properly issue rewards to its credit card customers, and signed up customers for card accounts without their consent.
There was an order issued by the Consumer Financial Protection Bureau (CFPB) and another regulatory body, the Office of the Comptroller of the Currency, that ordered Charlotte-based Bank of America to pay a total of $150 million in penalties.
Furthermore, it will also have to pay about $80.4 million to customers who were unfairly charged bogus fees, on top of the $23 million that it has already paid to customers who were wrongfully denied access to its credit card program because they were wrongly charged bogus fees.
Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), said in the release that these practices are illegal and undermine customer trust. According to the CFPB, they will be putting an end to these practices across the entire banking sector.
There was also a 90% drop in revenue from the non-sufficient fund fees that Bank of America incurred in the first half of 2022, according to a spokesman for the lender, Bill Halldin, as a result of the lender’s voluntary reduction of overdraft fees.
It seems that some of the Bank Of America practices exposed by the Wells Fargo fake accounts scandal in 2016 weren’t confined to that bank alone. Tuesday’s announcement the latest sign.
Wells Fargo has been punished by regulators for its sales culture that led to the creation of 3.5 million fake accounts as a result of misleading sales tactics.
There have, however, been other lenders who have made similar mistakes, including US Commercial Bank Of America, which last year paid a fine of $37.5 million for putting customers into unauthorized accounts with its banks.