Bank of America has been ordered by the Consumer Financial Protection Bureau to refund $100 million dollars to customers in New Jersey and 37 other states, and pay $150 million in fines. It must also pay $90 million in penalties to the CFPB and $60 million to the Office of the Comptroller of the Currency.
The bank is accused of “double-dipping” on overdraft fees, withholding reward bonuses on credit cards and opening accounts without customer consent. It is one of the highest financial penalties in years against Bank of America.
“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in a statement.
Bank of America had a policy of charging customers $35 after the bank declined a transaction because the customer did not have enough funds in their account, the CFPB said. The agency determined that the bank double-dipped by allowing fees to be repeatedly charged for the same transaction.
The company 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.