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NEW YORK (TIP): Bank of America has been ordered to pay more than $100 million to customers in New York and 37 other states. The bank was accused of “systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization,” according to the Consumer Financial Protection Bureau. Bank of America is headquartered in North Carolina, with branches and ATMs located in 38 states and the District of Columbia. Bank of America has 262 branches in over 100 different cities and towns across New York, including Long Island, New York City and the Hudson Valley. The bank also has over 3,500 more offices in thirty-seven states.
The banking giant must 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, according to federal officials.
“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.”
The banking company has already refunded $23 million to customers who were denied rewards bonuses according to the CFPB, but owes another $80.4 million to people the bank charged “unlawful non-sufficient funds fees.”
The Consumer Financial Protection Bureau said that customers don’t need to take action to receive a payment, as the burden is on the bank to either put funds back in consumer accounts or send a check. Full details, including the amount of refunds for individual customers and how exactly they will be paid, have not yet been released.
The fees often came when customers had routine monthly transactions, like a gym membership. If a customer had too low a balance to cover the transaction, it would be declined and BofA would charge the customer a $35 fee. The business, who hasn’t been paid, often would recharge the customer’s account, resulting in another $35 non-sufficient funds fee.
The bank ended this practice last year but will still have to repay customers who got charged before the policy was changed.
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.
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.
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