By Sneha Shankar - Bank of America Corp. NYSE:BAC agreed on Wednesday to pay $772 million in fines and refunds to settle regulator's accusations that it tricked people into buying unnecessary extra credit card services and charged others for credit card monitoring and reporting services that they never received.
The Charlotte, N.C.-based bank will pay fines totaling $45 million to the Office of the Comptroller of the Currency, or OCC, and Consumer Financial Protection Bureau, or CFPB, which said that the bank was “unfairly billing” consumers for services and was using “deceptive marketing and sales practices” for add-on products.
“Consumers paid at least $459 million in fees, interest, and over-limit charges for these products without receiving full services. Today’s announcement recognizes the refunds Bank of America has already provided to consumers harmed as a result of the illegal billing practices relating to these identity theft protection products,” CFPB said, in a statement Wednesday.
Bank of America did not admit or deny the claims but instead said, in a statement, that the bank had “stopped marketing identity theft protection products in December 2011 and credit card debt cancellation products in August 2012.” The bank said in its statement that it had informed regulators of these issues two years ago, and that it has issued refunds to most of its customers.
“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” Richard Cordray, the director of CFPB, said according to the New York Times, adding: “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”
The order from CFPB is the fifth such action taken by the agency. Other big settlements include JPMorgan Chase & Co. NYSE:JPM, which paid out $309 million in September 2013 and Capital One Financial Corp NYSE:COF, which was told to reimburse $150 million to more than two million customers in 2012.
“Instead of consumers receiving the protection they were promised, they were being illegally charged by one of the nation’s largest banks for little or no benefit to themselves,” Cordray said, according to the Times.