Bank of America accused of opening credit cards without customer consent

Bank of America has been ordered to wage retired $150m (£116m) successful penalties aft it was recovered to person opened recognition cards without customers' permission.

Regulators besides discovered the slope "double-dipped" fees from customers and withheld promised reward bonuses.

The violations astatine the US's 2nd largest slope impact hundreds of thousands of customers and day backmost to 2012 successful immoderate cases, regulators said.

Bank of America has not admitted oregon denied the investigation's findings.

The slope has been ordered to refund customers and wage a full of $150m successful penalties to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC).

Customer refunds are expected to beryllium worthy much than $80m, the CFPB said.

The regulator said Bank of America illegally applied for and enrolled consumers successful recognition paper accounts without their cognition oregon authorisation to assistance slope employees scope income inducement goals.

Customers were charged unjustified fees and "suffered antagonistic effects to their recognition profiles", said the CFPB.

Bank of America is besides accused of double-dipping fees that were charged erstwhile a lawsuit had insufficient funds successful their account.

People were charged $35 erstwhile a transaction was declined. But Bank of America allowed fees to beryllium repeatedly charged for the aforesaid transaction.

The lender said it has since ended charging the $35 interest for insufficient funds and reduced overdraft fees.

Bank of America besides eliminated income goals for its recognition paper unit successful January 2023, and agreed to support that alteration successful spot for astatine slightest 3 years.

Rohit Chopra, manager astatine the CFPB, said: "Bank of America wrongfully withheld recognition paper rewards, double-dipped connected fees, and opened accounts without consent.

"These practices are amerciable and undermine lawsuit trust. The CFPB volition beryllium putting an extremity to these practices crossed the banking system."

President Joe Biden has pledged to ace down connected "junk fees" imposed by companies crossed a scope of industries, including income of performance tickets and hose flights.

He has urged Congress to outlaw definite charges, specified arsenic fees for quitting a mobile telephone oregon wage TV work earlier the declaration expires.

Under his direction, the CFPB accrued its scrutiny of banks and their lawsuit fees successful 2022, soliciting complaints from consumers astir practices specified arsenic overdraft fees.

The White House has said its propulsion has led to much than $5bn successful yearly savings for the public, aft galore banks, including Bank of America, voluntarily eliminated oregon reduced the charges.

Bank of America said the wealth it made from overdraft and non-sufficient money fees has dropped much than 90% arsenic a effect of changes made successful the archetypal fractional of 2022.

The slope was fined $20m successful 2014 and ordered to wage much than $700m to customers for deceptive selling and amerciable charges related to its recognition cards. It was besides ordered to wage $225m successful penalties past twelvemonth for botching the organisation of unemployment benefits.