Bank of America fined for consumer abuses, fake accounts, bogus fees

Financial institution of America, the second-largest U.S. financial institution by belongings, engaged in misleading practices that damage lots of of hundreds of its clients in recent times, the Client Monetary Safety Bureau mentioned Tuesday.

The financial institution charged a number of $35 overdraft charges for a similar transaction, didn’t correctly situation rewards to bank card customers and signed up clients for card accounts with out their consent, the CFPB mentioned in a press release.

Charlotte, North Carolina-based Financial institution of America was ordered to pay a complete of $150 million in penalties to the CFPB and one other regulator, the Workplace of the Comptroller of the Forex. It additionally has to pay about $80.4 million to clients who have been unfairly charged bogus charges, on prime of the $23 million it already paid to clients who have been improperly denied card awards.

“These practices are unlawful and undermine buyer belief,” CFPB Director Rohit Chopra mentioned within the launch. “The CFPB shall be placing an finish to those practices throughout the banking system.”

Financial institution of America spokesman Invoice Halldin mentioned in a response the lender “voluntarily diminished overdraft charges and eradicated all non-sufficient fund charges within the first half of 2022,” leading to a 90% drop in income from these charges.

The announcement Tuesday is the newest signal that a number of the practices uncovered by the Wells Fargo faux accounts scandal in 2016 weren’t confined to that financial institution.

Regulators have punished Wells Fargo for a gross sales tradition that led to the creation of three.5 million faux accounts. However different lenders have had comparable lapses, together with U.S. Financial institution, which paid a $37.5 million nice final 12 months for placing clients into unauthorized accounts.