AP (NEW)

Bank of America to pay $100M+ for doubling fees, opening accounts without customer consent

Jul 11, 2023, 7:10 AM | Updated: 9:56 am

New York (CNN) — Multiple US banks were hit by deposit delays on Friday caused by an error at a ...

File - A customer uses an ATM at a Bank of America location in San Francisco, Monday, April 24, 2023. Bank of America is being ordered to pay more than $100 million to customers for double-dipping on some fees imposed on customers, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization. (Jeff Chiu/Associated Press)

(Jeff Chiu/Associated Press)

Bank of America must 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 customer consent.

It is one of the highest financial penalties in years against Bank of America, which has largely spent the last 15 years trying to clean up its reputation and market itself to the public as a bank focused on financial health and not on overdraft fee income.

BofA will need to refund $100 million to customers, pay $90 million in penalties to the Consumer Financial Protection Bureau and $60 million to the Office of the Comptroller of the Currency. “Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra, in a statement. “These practices are illegal and undermine customer trust.”

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. The agency determined that the bank double-dipped by allowing fees to be repeatedly charged for the same transaction.

BofA has been cutting down on its reliance on overdraft fee revenue for more than a decade, and cut how much it charges customers for an overdraft to $15 last year. Brian Moynihan, the bank’s CEO and chairman, told The Associated Press in 2022 that under these new policies, overdraft fee income was down 90% from 2021. The bank said that it voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of last year.

Bank of America also offered people cash rewards and bonus points when signing up for a card, but the CFPB said the bank illegally withheld promised credit card account bonuses.

The CFPB also found that, since at least 2012, Bank of America employees illegally applied for and enrolled consumers in credit card accounts without their knowledge or authorization. It is a similar charge that was made against Wells Fargo, which paid billions in fines after it was determined that the San Francisco bank opened millions of unauthorized bank accounts in order to meet unrealistic sales goals.

In 2014 the CFPB ordered Bank of America to pay $727 million for illegal credit card practices. Last year it was ordered to pay a $10 million civil penalty over unlawful garnishments. Also in 2022, the CFPB and OCC fined Bank of America $225 million and required it to pay hundreds of millions of dollars in redress to consumers for botched disbursement of state unemployment benefits at the height of the COVID-19 pandemic.

Related: Banking crisis leaves Utah company with lessons learned

 

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

AP (New)

A demonstrator waves Iranian and Palestinian flags during an anti-Israeli gathering at the Felestin...

Associated Press

The Latest | Israel says 99% of drones and missiles launched by Iran were intercepted

Israel is hailing the success of its defenses after an attack by Iran involving hundreds of drones, ballistic missiles and cruise missiles.

8 days ago

Former President Trump shown,, trump hush money trial started Monday...

Associated Press

Trump says Arizona’s abortion ban goes too far while defending the overturning of Roe v. Wade

Former President Trump said Arizona's abortion ban goes too far, but defended the overturning of Roe v. Wade.

12 days ago

Beverly Smith picks produce while grocery shopping at Ream's....

Associated Press

What stores are open on Easter Sunday 2024? See Walmart, Target, Costco hours

Need to make a last-minute trip to the store for more Easter eggs and candy? Make sure you know what stores are open and closed on Easter.

23 days ago

FILE - Joana Vicente attends the 2024 Sundance Film Festival's Opening Night Gala on Jan. 18, 2024,...

Lindsey Bahr AP Film Writer

Joana Vicente steps down as Sundance Institute CEO

Joana Vicente has been announced to be stepping down as the CEO of the Sundance Institute after taking the position two and a half years ago.

1 month ago

The price of chocolate is rising just in time for Easter due to crop damages in West Africa. (Stock...

Damian J. Troise

Rich cocoa prices hitting shoppers with bitter chocolate costs as Easter approaches

Cocoa prices are rising because the chocolate's plant crops have been damaged due to high heat temperatures in West Africa.

1 month ago

St. Patrick's Day is today! To celebrate, learn a little bit about the history, why American's cele...

Deepti Hajela

From 4-leaf clovers to some unexpected history, all you need to know about St. Patrick’s Day

St. Patrick's day is today. To celebrate, read a little about the holiday's history, why American's celebrate it, and who St. Patrick was.

1 month ago

Sponsored Articles

Young couple hugging while a realtor in a suit hands them keys in a new home...

Utah Association of Realtors

Buying a home this spring? Avoid these 5 costly pitfalls

By avoiding these pitfalls when buying a home this spring, you can ensure your investment will be long-lasting and secure.

a person dressed up as a nordic viking in a dragon boat resembling the bear lake monster...

Bear Lake Convention and Visitors Bureau

The Legend of the Bear Lake Monster

The Bear Lake monster has captivated people in the region for centuries, with tales that range from the believable to the bizarre.

...

Live Nation Concerts

All the artists coming to Utah First Credit Union Amphitheatre (formerly USANA Amp) this summer

Summer concerts are more than just entertainment; they’re a celebration of life, love, and connection.

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

Bank of America to pay $100M+ for doubling fees, opening accounts without customer consent