Bank of America joined the club of consumer abusers – Wells Fargo had been the well-established leader of this club and the poster-child for abusive consumer practices. 

For years, Bank of America avoided federal enforcement for abuses and could distinguish itself from the poster-child, Wells Fargo.  Bank of America’s conduct is inexplicable.

In response to the Wells Fargo scandal, you would have expected that Bank of America (and other major banks) would have double-checked its own consumer practices to ensure that they were not engaged in similar misconduct.  Instead, it appears that Bank of America, like many other banks, just ignored the possibility and blithely continued on its way in the marketplace.

The Consumer Financial Protection Bureau (“CFPB”) and the Office of Comptroller of the Currency (“OCC”) announced coordinated enforcement actions and settlements. Bank of America agreed to pay CFPB $190 million for consumer harms and penalties, and $60 million to the OCC in penalties.

When you look at Bank of America’s conduct, it will ring familiar with Wells Fargo’s abuses.  Bank of America employees opened credit-card accounts in customers’ names without their consent using credit reports it obtained illegally.  Staring in 2012, Bank of America employees illegally applied for and enrolled consumers in credit-card accounts in order to reach sales incentive goals.  Beginning this year, Bank of America eliminated the sales incentives for branch employees for sales of credit-card accounts.

In addition, Bank of America charged overdraft fees multiple times for the same transactions.  Specifically, Bank of America charged customers $35 after the bank declined a transaction when the customer had insufficient funds in his/her account.  Over a number of years, Bank of America generated substantial additional revenues by charging multiple $35 fees for the same transaction.

Also, Bank of America targeted individuals with special offers of cash and points when signing up for a credit card, but failed to provide such bonuses to tens of thousands customers who submitted in-person or over-the-phone applications. The bank also denied sign-up bonuses to consumers due to the failure of Bank of America’s business processes and systems.

The CFPB ordered Bank of America to compensate consumers charged insufficient funds fees, totaling approximately $80.4 million in consumer compensation.  In addition, the CFPB ordered Bank of America to compensate consumers who incurred costs from the unauthorized opening of new credit card accounts.

The OCC’s separate enforcement action against Bank of America imposed a $60 million civil penalty for its practice of assessing multiple overdraft and insufficient fund fees for a single transaction. The OCC found that Bank of America charged customers tens of millions of dollars in fees on resubmitted transactions, in violation of Section 5 of the Federal Trade Commission Act prohibition on unfair or deceptive acts or practices.

In 2014, the CFPB ordered Bank of America to pay $727 million to compensate victims for illegal credit card practices.  In May 2022, the CFPB ordered Bank of America to pay a $10 million penalty for unlawful garnishments, and later in 2022, the CFPB and OCC fined Bank of America $225 million for erroneous disbursement of state unemployment benefits during the COVID-19 pandemic.