Bank of America Ordered to Pay $250 Million Over 'Junk Fees,' Other Matters
July 11 2023 - 9:31AM
Dow Jones News
By Will Feuer
The Consumer Financial Protection Bureau said it has ordered
Bank of America to pay $250 million in penalties and restitution to
harmed consumers for double-dipping on certain fees, among other
matters.
"Bank of America wrongfully withheld credit card rewards,
double-dipped on fees, and opened accounts without consent," CFPB
Director Rohit Chopra said. "These practices are illegal and
undermine customer trust. The CFPB will be putting an end to these
practices across the banking system."
Bank of America previously had a policy of charging customers
$35 after the bank declined a transaction because the customer
didn't have enough funds in their account. For years, though, the
bank "double-dipped" by repeatedly charging fees for the same
transaction, the CFPB said.
Last year, Bank of America reduced its overdraft fees to $10 and
eliminated all non-sufficient fund fees.
"We voluntarily reduced overdraft fees and eliminated all
non-sufficient fund fees in the first half of 2022," a spokesman
said. "As a result of these industry leading changes, revenue from
these fees has dropped more than 90%."
The CFPB said the bank also withheld promised credit card
account bonuses to tens of thousands of consumers. Bank of America
employees also illegally applied for and enrolled consumers in
credit card accounts without consumers' knowledge or authorization
since at least 2012 to reach now-disbanded incentive goals,
according to the CFPB.
To resolve the matters, Bank of America will pay more than $100
million to harmed consumers, as well as $90 million in penalties to
the CFPB and $60 million to the Office of the Comptroller of the
Currency.
Write to Will Feuer at Will.Feuer@wsj.com
(END) Dow Jones Newswires
July 11, 2023 09:16 ET (13:16 GMT)
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