The Consumer Financial Protection Bureau said Bank of America illegally charged customers for services, such as credit monitoring and credit reporting services, without actually providing the services. The bank will pay consumers $772 million in refunds, a $20 million fine to the CFPB and a $25 million fine to the Office of Comptroller of the Currency.
“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” said Richard Cordray, the director of the consumer agency. “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”
Bank of America spokesman Tony Allen confirmed the settlement and said that "most of the refunds have already been issued."
The bank's deceptive practices included the bank's telemarketers telling customers that certain services were free for the first 30 days, when in fact the bank charged customers. Bank of America also misled customers by telling them they were agreeing to receive additional information about add-on services, but were actually being signed up for these services.
Additionally, the bank improperly charged 1.9 million consumers for credit card identity-theft monitoring and reporting services, but the services were not fully rendered.
The CFPB has come down hard on banks selling consumers credit card products they did not want or did not know they were being signed up for. The regulator in 2012 asked Capital One to reimburse $150 million to its two million customers and has since called out American Express and JPMorgan Chase for similar wrongdoings.
[The New York Times]