Bank of America Fined $250 Million for Charging Illegal Fees

Bank charged illegal overdraft fees, opened accounts without authorization

The Consumer Financial Protection Bureau (CFPB) announced that it is ordering Bank of America to provide $100 million in reimbursements to customers and pay $150 million in penalties following an investigation that found the bank charged millions in illegal fees and opened accounts without receiving customer permission.

“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.”

The findings of the CFPB investigation indicate that Bank of America failed to credit promised credit card rewards - essentially keeping money promised to customers. The bank also charged overdraft fees ($35 each) multiple times for the same transaction, resulting in millions of dollars in illegally-gained profit at the expense of customers. The bank also opened new accounts for existing customers without informing the customer or receiving their consent.

The benefits withheld from customers and the illegal fees totaled $100 million, which Bank of America must now pay to the impacted customers. Additionally, Bank of America will pay a total of $150 million in civil penalties for their illegal activity.

Bank of America, one of the top five largest banks in the nation, is no stranger to penalties for illegal activity. In 2014, the bank was ordered to pay $727 million for illegal credit card practices. Late last year, the bank paid $225 million in refunds and penalties for its mishandling of unemployment benefits during the COVID-19 pandemic.

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