Bank of America (“BofA”) recently settled with the U.S. Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for deceptive credit-card practices. BofA is ordered to pay $727 million in refunds to customers and $45 million in penalties.
The allegations were BofA induced customers to purchase certain add-ons, such as identity-theft protection, debt cancellation, credit monitoring and credit reporting services. Some services were superfluous since they were already mandatory under federal law. Others were never received by the customer.
The allegations included BofA defrauded 1.4 million customers through “deceptive marketing” practices, and about 1.9 million customers were illegally charged for credit monitoring and credit reporting services that were not provided.
Richard Cordray, Director of Consumer Financial Protection Bureau, stated, “Bank of America both deceived consumers and unfairly billed consumers for services not performed. We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”