Socialites, get into this! Bank of America is going to have to cough up a whole bunch of money to customers.
According to reports, the bank will reimburse customers more than $100 million and pay $150 million in fines for “double-dipping” on overdraft fees, withholding reward bonuses on credit cards, and opening accounts without customers knowing or giving their consent. CFPB Director Rohit Chopra said in a statement
“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.”
In addition to that, BOA must pay $90 million in penalties to the Consumer Financial Protection Bureau as well as $60 million to the Office of the Comptroller of the Currency. Bank of America had a policy of charging customers $35 after the bank declined a transaction because the customer did not have enough funds in their account, the CFPB said, a big reason why the major bank was hit with fines and penalties. The agency determined that the bank double-dipped by allowing fees to be repeatedly charged for the same transaction.
For example, if customers had routine monthly transactions, like a gym membership and their balance to cover the transaction was too low, the transaction would be declined. However, BofA would the. charge the customer a $35 fee. It was said that it would also then recharge the customer’s account, resulting in another $35 non-sufficient funds fee. Although the bank has ended its practice since last year, BOA will still have to repay customers who got charged before the policy was changed.
To note, since 2012, the CFPB also found that Bank of America employees illegally applied for and enrolled consumers in credit card accounts without their knowledge or authorization.
This all comes just months after another major bank, Wells Fargo agreed to pay $3 billion to settle criminal and civil investigations into a long-running practice whereby company employees opened millions of unauthorized bank accounts to achieve unrealistic sales goals.
As we previously reported, the $3 billion mega payment included a $500 million civil payment to the Securities and Exchange Commission, which will distribute those funds to investors who were impacted by Wells’ actions.
The settlement with the Department of Justice covers Wells Fargo as a company. However, the DOJ could still go directly after individuals who violated bank laws. Earlier this year, the Office of the Comptroller of the Currency, one of the nation’s bank regulators, fined several of Wells’ former top executives for their role in the scandal.