Bank of America fined $150M for credit card reward, overdraft policy, sales violations

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Bank of America fine overview:

• Who: The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) have fined Bank of America $150 million.
• Why: Bank of America allegedly charged improper non-sufficient funds fees, misled consumers about credit card bonuses and opened credit cards without consumers’ consent.
• Where: The settlements were reached with the CFPB and OCC.

Bank of America NA has settled allegations from the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) related to some of the bank’s practices regarding its credit card reward and other practices, Law360 reports.

The CFPB and OCC alleged Bank of America charged improper overdraft fees on customers’ declined transactions, failed to pay advertised credit card sign up bonuses and opened unauthorized credit card accounts to meet the bank’s sales targets.

The Bank of America fine will include $90 million in civil penalties from the CFPB and $60 million in civil penalties from the OCC. Bank of America will also pay $80.4 million to refund customers who were allegedly charged improper non-sufficient funds (NSF) fees.

Bank of America credit card and NSF fee practices were improper, OCC and CFPB find

The OCC found that when Bank of America declined a check or electronic transaction due to insufficient funds between March 2020 and November 2021, a merchant could resubmit the transaction. If the customer’s account still had insufficient funds to cover the transaction, Bank of America would charge a $35 NSF fee in addition to the initial $35 NSF fee from when it first declined the transaction.

Bank of America allegedly failed to adequately inform consumers they could be charged multiple fees if a merchant resubmitted a transaction for payment. The bank allegedly charged tens of millions of dollars in NSF fees when merchants resubmitted a transaction for payment, “resulting in substantial injury to customers that was not outweighed by any benefits to customers or competition,” the OCC said.

The CFPB took issue with the way Bank of America credit card rewards were offered and paid. Bank of America allegedly misled consumers into thinking promotional bonus offers on its rewards credit cards were available to all consumers when they were only available to consumers who applied online.

The CFPB also found Bank of America applied for and opened credit cards without consumers’ consent and obtained consumer reports on customers without a permissible purpose in violation of the Truth in Lending Act, the Fair Credit Reporting Act and the Consumer Financial Protection Act of 2010.

“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” CFPB Director Rohit Chopra said in a statement. “These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”

Bank of America is one of the banks that was fined over its employees’ use of WhatsApp for work-related communications last year.

What do you think about the Bank of America fine? Tell us about it in the comments!

The Bank of America credit card settlements are In the Matter of Bank of America NA, Case No. AA-ENF-2023-19, before the Office of the Comptroller of the Currency; In the Matter of Bank of America NA, Case No. 2023-CFPB-0006, before the Consumer Financial Protection Bureau; and In the Matter of Bank of America NA, Case No. 2023-CFPB-0007, before the Consumer Financial Protection Bureau.

Read About More Class Action Lawsuits & Class Action Settlements:

• Coinbase responds to SEC suit saying it worked with regulator prior to IPO
• Judge orders Amazon to produce UK, Germany sales data in antitrust class action
• Citigroup, Deutsche Bank, others hit with lawsuit over alleged collusion to fix UK bond prices 
• $290M JPMorgan settlement resolves lawsuit alleging bank assisted Epstein sex trafficking