Bank of America agreed to pay a total of $250 million in fines and restitution on Tuesday to resolve charges that it routinely double-charged consumers fees, withheld promised credit card bonuses, and established unauthorized accounts.
According to Reuters, Bank of America has agreed to pay $100 million in reparations to affected customers. An additional $150 million in civil fines will be put aside after the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) determined that the bank broke many regulations beginning in 2012.
Bank of America, headquartered in Charlotte, North Carolina, serves 68 million individuals and small businesses. As of March 31, the bank has $2.4 trillion in consolidated assets and $1.9 trillion in domestic deposits, making it the second-largest bank in the United States.
According to the CFPB's official statement, the institution had a policy of charging clients $35 when the bank denied a transaction because the customer did not have enough funds in their account.
The sanctions came after Bank of America was recently revealed for providing the FBI with a list of anybody who utilized its services in Washington, D.C. whether or not they were part in the events on January 6.
The government also ruled that the bank double-dipped by charging fees for the same transaction several times.
In the first half of last year, the bank stated it voluntarily decreased overdraft costs and abolished all non-sufficient fund fees.
When people signed up for a card, Bank of America also provided cash prizes and bonus points, but the CFPB said the firm improperly withheld promised credit card account benefits.
According to the CFPB, Bank of America employees have illegally registered for and enrolled clients in credit card accounts without their knowledge or consent since at least 2012.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra said in the prepared statement. “These practices are illegal and undermine customer trust.”
According to the Associated Press, the Consumer Financial Protection Bureau ordered Bank of America to pay $727 million in 2014 for improper credit card activities.
It was ordered to pay a $10 million civil penalty last year for illegal garnishments.
Also in 2022, the CFPB and OCC penalized Bank of America $225 million and ordered it to pay hundreds of millions of dollars in customer restitution for mishandled delivery of state unemployment benefits during the height of the Chinese coronavirus outbreak, according to AP.