Bank of America accused of opening fake accounts, charging illegal junk fees
Bank of America accused of opening fake accounts, charging illegal junk fees
Federal regulators accused Bank of America of harming customers by double-dipping on fees, withholding credit card rewards and opening fake accounts.
Credit to rexxit user RedditIsOwendByTheWS
(Text below, linked site has annoying auto-play videos.)
July 11, 2023 / 12:00PM / CNN
By Matt Egan and Jeanne Sahadi, CNN
NEW YORK - Federal regulators said Tuesday they found that Bank of America harmed customers by double-dipping on fees, withholding credit card rewards and opening fake accounts, all of which are violations of various consumer financial protection laws.
As a result, the Consumer Financial Protection Bureau ordered Bank of America (BAC) to pay more than $100 million to customers and $90 million in penalties. The Office of the Comptroller of the Currency also ordered Bank of America (BAC) to pay $60 million in fines.
The bank is the second largest in the United States, serving 68 million individuals and small businesses.
Some of the charges are reminiscent of the Wells Fargo scandal last decade that involved opening millions of bank accounts without customer authorization.
"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."
And this is how we get a banking crisis. Banks are unscrupulous.
Reminder that "systematically important financial institution" is a regulatory term that exists because these banks are "too big to fail".
Reminder that if we cannot allow an institution to fail at any cost, but also cannot stop them from committing large-scale fraud like this, they are in charge - period.
That is the definition of moral hazard. There is no scenario where "not committing crime" makes them richer, ergo crime.