The US Consumer Financial Protection Bureau (CFPB) has ordered Bank of America to pay more than $250m in penalties and compensations for systematically double-dipping customer fees, withholding reward bonuses, and opening fake accounts.
Bank of America will pay over $100m of the amount in compensations to customers as well as pay total penalties of $90m and $60m to the CFPB and the Office of the Comptroller of the Currency (OCC), respectively.
According to the US government agency, the bank has caused harm to hundreds of thousands of customers over a period of several years across various product lines and services.
Bank of America charged $35 to customers once the bank declined a transaction as the customer had insufficient funds in their account.
The CFPB found that Bank of America double-dipped by allowing fees to be charged repeatedly for the same transaction.
Besides, Bank of America unlawfully held back promised credit card account incentives, including cash rewards or bonus points, to tens of thousands of consumers.
Furthermore, the agency found that the bank misappropriated sensitive personal information to open accounts without customer knowledge or authorisation.
CFPB Director Rohit Chopra said: “Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent.
“These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
Earlier in May 2022, the CFPB ordered Bank of America to pay a $10m civil penalty over illegal garnishments.
The bank was again fined $225m in the same year by the CFPB and OCC to pay hundreds of millions of dollars in redress to consumers for bungled disbursement of state unemployment benefits at the peak of the COVID-19 pandemic.
