The Consumer Financial Protection Bureau (CFPB) has taken action against Bank of America, for engaging in a series of unethical practices. The bank has been ordered to pay $150 million in fines and $100 million to customers as a result of its systematic exploitation of fees, failure to deliver promised credit card rewards, and unauthorized opening of accounts using sensitive personal information. Wells Fargo found themselves under the microscope for the unauthorized opening of accounts as well in recent years.
Part of this action goes back to things that happened over 11 years ago in 2012. Bank of America harmed hundreds of thousands of consumers through various means.
Double-Dipping Scheme:
Bank of America implemented a deceitful policy wherein customers were charged a fee of $35 when their transactions were declined due to insufficient funds. The investigation conducted by the CFPB unveiled that the bank engaged in double-dipping, repeatedly charging fees for the same transaction. This illicit practice allowed Bank of America to generate significant additional revenue by illegally imposing multiple $35 fees.
Withheld Credit Card Rewards:
To attract customers, Bank of America enticed individuals with special offers of cash and points rewards upon signing up for a credit card. However, the bank failed to honor its promises to tens of thousands of consumers when they withheld the credit card bonuses, such as cash rewards or bonus points, from those who applied in-person or over the phone. The CFPB says that Bank of America’s flawed business processes and systems were responsible for denying these rewards to eligible customers.
Unauthorized Opening of Accounts:
Beginning in 2012, Bank of America employees engaged in fraudulent practices to meet sales-based incentive goals and evaluation criteria. They illegally enrolled consumers in credit card accounts without their knowledge or authorization, misusing sensitive personal information to complete applications. This unauthorized account opening resulted in unjustified fees for customers, negative impacts on their credit profiles, and forced them to spend time rectifying the errors caused by the bank.
Consequences and Recurring Patterns:
Bank of America has a history of facing enforcement actions for its illicit activities. In 2014, the CFPB ordered the bank to pay $727 million in redress for illegal credit card practices. In subsequent years, Bank of America has repeatedly been penalized by both the CFPB and the Office of the Comptroller of the Currency (OCC). These penalties included fines and the requirement to compensate consumers for mishandled state unemployment benefits during the COVID-19 pandemic.
About Harry Jacobs:
Harry Jacobs is the Founder of Credit Restoration of Nevada. He is widely regarded as one of the experts in the field of credit, credit repair and credit restoration. His knowledge of Fair Debt Collection Practices and the Fair Credit Reporting Act make him a tremendous resource for consumers and consumer law firms.