Fake Accounts Cost Bank of America
Posted on 07/11/2023
Bank of America was cited by The Consumer Financial Protection Bureau and ordered to pay US$ 250 million for illegally charging fees, failing to deliver credit card rewards, and even opening fake accounts in a similar crime to that committed by Wells Fargo years ago. Wells Fargo opened up to 1.5 million checking and savings accounts and 500,000 credit cards without any customer authorization before The Consumer Financial Protection Bureau put an end to it in 2016. Bank customers will see a share of a US$ 100 million refund, and another US$ 150 million in penalties will go to the government.
CFPB Director Rohit Chopra said: “Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent. These practices are illegal and undermine customer trust. The CFPB will be putting an end to these practices across the banking system.”
Complying with the legal framework and some other steps will have an impact on the bottom line. Bank of America said: “We voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022. As a result of these industry leading changes, revenue from these fees has dropped more than 90 percent.”
