Bank of America is facing hundreds of millions in fines for an alleged pattern of illegal and predatory practices against customers, reported CNN on Tuesday.
"The Consumer Financial Protection Bureau ordered Bank of America to pay more than $100 million to customers and $90 million in penalties," reported Matt Egan. "The Office of the Comptroller of the Currency also ordered Bank of America to pay $60 million in fines."
Specifically, the company is accused of creating fake accounts in customers' names, illegally charging extra junk fees, and not delivering on advertised credit card rewards.
“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
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The accusation is similar to the Wells Fargo scandal of 2016, when that bank too was found to have fraudulently opened millions of accounts in customers' names, in order to charge them fees they never agreed to. The bank paid $3 billion in 2020 to resolve the scandal, but faces other ongoing accusations from its own employees, including a pattern of racial bias.
The Biden administration has declared as one of its priorities a crackdown on so-called "junk fees" across several industries, where companies ranging from banks to airlines to hotels, where the full price of the service is obscured and fees are hidden until after purchase — a practice that traps consumers into paying more than they were led to believe, and that makes it hard to compare pricing between competitors.
