Bank of America Fined $150 Million Over ‘Junk Fees’
“These practices are illegal and undermine customer trust,” Rohit Chopra, the director of the consumer bureau, said in a statement. “The C.F.P.B. will be putting an end to these practices across the banking system.”
Regulators said that Bank of America imposed improper overdraft fees by double-charging customers over the same transaction. The first charge would be a $35 “insufficient funds” penalty levied against a customer who tried to pay for something by check or automated transaction without having the funds necessary to do so. The transaction would be declined, but if the merchant trying to collect the money resubmitted a request for payment, the money would go through and another $35 charge would hit the customer’s account, this time as an overdraft fee, or it would be denied again, incurring a second “insufficient funds” fee.
A Bank of America spokesman said the bank had “voluntarily” reduced overdraft fees from $35 to $10 in early 2022 and had eliminated its $35 “insufficient funds” penalty. It has since seen a 90 percent drop in revenue from such fees, the spokesman said.
In addition to the action on overdraft fees taken together by the two regulators, the consumer bureau said it had discovered two other areas where it said the bank was mistreating customers. For some customers who were enticed into opening new credit card accounts, the bureau found that Bank of America had not provided the sign-up bonuses it had promised to customers who opened accounts on the phone or in person instead of online.
The bureau also said it had uncovered some instances of Bank of America employees opening new cards in customers’ names without their knowledge or consent in order to meet sales goals.
Source: The New York Times
