CFPB: BofA to pay $727M for deceptive practices
April 10, 2014 – CFPB has ordered Bank of America and FIA Card Services to pay an estimated $727 million in relief to consumers harmed by deceptive advertising of the firms' credit card debt cancellation products and identity theft protection services.
CFPB reported that nearly 1.4 million consumers were affected by Bank of America's deceptive marketing of these products and that the bank illegally charged about 1.9 million consumer accounts for credit monitoring and reporting services that were never received. CFPB said Bank of America will pay a $20 million civil money penalty to the bureau as well.
"We have consistently warned companies about illegal practices related to credit card add-on products," said CFPB Director Richard Cordray in a press statement. "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."
CFPB, to ensure BofA honors its obligation to consumers, is requiring the bank to:
- no longer participate in illegal practices;
- end unfair billing practices;
- repay affected consumers and do so conveniently; and
- pay a $20 million penalty to CFPB's Civil Penalty Fund.
Furthermore, the Office of the Comptroller of the Currency also imposed a $25 million penalty against Bank of America and its credit card subsidiary FIA Card Services. The OCC also ordered the bank to pay about $459.5 million to 1.9 million consumer accounts as a result of its harmful and unfair practices.
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