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The Consumer Financial Protection Bureau has ordered Bank of America to pay $772 million in fines and compensation to settle allegations that the bank swindled millions of customers with deceptive marketing and billing practices for credit card add-on services.
Roughly 1.4 million consumers were affected by Bank of America’s deceptive marketing of their add-on products. Bank of America also illegally charged approximately 1.9 million consumer accounts for credit monitoring and credit reporting services that they were not receiving.
The $772 million penalty will be broken down as follows, LowCards.com said:
- Refunds. About $727 million will be refunded to consumers.
- Fines. The Office of the Comptroller of the Currency fined BofA $25 million in civil penalties for “unfair billing practices.” The bank also has to put $20 million into the CFPB Civil Penalty Fund.
The Charlotte, N.C.-based bank is accused, among other things, of misleading customers into thinking that the first month of credit card payment protection products would be free. The press release has more details about which add-on services are involved in the settlement.
Here’s what Money Talks News founder Stacy Johnson has had to say about those types of debt protection policies.
“We have consistently warned companies about illegal practices related to credit card add-on products,” CFPB director Richard Cordray said in the statement. “Bank of America both deceived consumers and unfairly billed consumers for services not performed. We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”
The Bank of America settlement is the most recent in the CFPB’s crackdown on banks’ marketing of credit card add-on products. Capital One, American Express and JPMorgan Chase have all settled with the CFPB.
In other Bank of America news, the company is reportedly closing three offices and slashing 3,000 jobs overseas. The layoffs, which will happen over the next 12 months, are primarily call center jobs, The Charlotte Business Journal said.
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