Bank of America was ordered to pay $150 million in fines for double-charging customers, withholding promised reward bonuses for credit card holders, and opening thousands of bank accounts under customers’ names without their knowledge, a federal investigation revealed.
The Consumer Financial Protection Bureau (CFPB) announced its findings in a news release on Tuesday, saying Bank of America customers were charged overdraft fees multiple times after a declined transaction on a widespread basis. The bank charged an account holder $35 if they didn’t have enough money in their account to cover a transaction, but the CFPB found that Bank of America was allowing the same transaction to go through more than once, charging an insufficient funds fee of $35 each time. Bank of America dropped its overdraft fees to $10 last year and eliminated its penalty for insufficient funds, and a spokesperson told The New York Times this change resulted in a 90% drop in revenue previously accrued from overdraft fees.
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The investigation also found that Bank of America had promised its customers special offers if they signed up for a credit card, including cash bonuses and bonus points, but never delivered. Its business processes and systems denied consumers’ sign-up bonuses, while it didn’t honor its reward promises for consumers who signed up in person or over the phone, according the CFPB.
The CFPB reported Bank of America had violated yet more laws when it opening unauthorized accounts using sensitive customer information since at least 2012. The CFPB said the bank opened the accounts to meet “sales-based incentive goals and evaluation criteria,” but this resulted in a drop in customers’ credit profiles and charged them unjustified fees.
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“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” CFPB Director Rohit Chopra said in the news release. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
In response to the findings, CFPB ordered Bank of America to pay out more than $80 million to the customers affected by the bank’s double-dipping, credit card bonus withholdings, and misappropriation of personal information. Bank of America will pay $90 million in penalties to the CFPB for illegally double-charging customers and another $60 million in penalties to the Office of the Comptroller of the Currency (OCC).
This is not the first time Bank of America has been fined by the CFPB for illegal activity toward consumers. The bank was forced to pay $727 million to victims of its illegal credit card practices in 2014. Then, in May of last year, Bank of America was required to pay a $10 million civil penalty for unlawful garnishments. Later that same year, the CFPB and the OCC fined it $225 million for not accurately disbursing state unemployment benefits during the Covid-19 pandemic.
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