Federal Regulators Accused Bank of America; Double-Charged Customers and Created Bogus Accounts!

Why Federal Regulators Accused Bank Of America?

The Consumer Financial Protection Bureau (CFPB) has accused the bank of wrongfully withholding credit card rewards, overcharging customers’ fees, and creating sham accounts without customer consent, CBS News reported.

As part of the settlement, Bank of America will pay $250 million in penalties, with $100 million to be returned to affected customers. The CFPB aims to put an end to these illegal practices and rebuild customer trust in the banking system.

The allegations against Bank of America by Federal regulators echo a similar scandal involving Wells Fargo in 2017, where employees opened millions of fraudulent accounts to meet sales targets. The CFPB states that Bank of America employees applied for and enrolled customers in credit card accounts without their knowledge or authorization, leading to unjustified fees and negative effects on customers’ credit profiles.

Furthermore, the bank allegedly withheld promised credit card account bonuses and rewards, denying customers the benefits they were entitled to receive, Federal regulators confirmed.

Bank of America has made changes to its fee structure since the incidents, no longer charging the fees that triggered the government’s fine. The bank claims to have voluntarily reduced overdraft fees and eliminated non-sufficient fund fees in the first half of 2022. However, the bank has not addressed the allegations of opening fake credit card accounts and denying reward points.

This is not the first time Bank of America has faced penalties for its actions. In the past, the bank has been fined for improper garnishment of customers’ wages, mismanaging state unemployment benefits, and illegally marketing credit card add-on products. The $250 million financial penalty is one of the highest levied against the bank.

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Federal Regulators Praised By Advocacy Groups

Consumer advocacy groups have praised the Federal regulators’ enforcement action, highlighting the importance of having a federal agency monitoring the financial marketplace to protect consumers from deceptive practices. Bank of America’s repeated offenses demonstrate the need for strict oversight and accountability within the banking industry.

As the settlement proceeds, customers affected by Bank of America’s actions can expect to receive restitution, while the bank will face increased scrutiny by Federal regulators to ensure compliance with consumer protection regulations in the future.

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