Today, Bank of America was ordered by the Consumer Financial Protection Bureau to refund $727 million to consumers who were deceived by the bank's marketing of credit card payment protection programs and others who were charged for credit monitoring services they never fully authorized.
In addition, the Office of the Comptroller of the Currency fined Bank of America $25 million in civil penalties for unfair billing practices. The bank also has to pay $20 million to the CFPB Civil Penalty Fund.
The CFPB issued a consent order that showed over 1.4 million consumers were deceived by the marketing of two credit card payment protection programs. These products, called "Credit Protection Plus" and "Credit Protection Deluxe," allowed customers to request the bank cancel some credit card debt in the event of certain hardships like disability and involuntary unemployment, or certain life events such as retirement or entering college. The CFPB found that the telemarketing practices used in selling these products were misleading. This took place between 2010 and 2012.
Bank of America must provide approximately $268 million in refunds to the more than 1.4 million customers affected by these deceptive marketing practices.
In addition, Bank of America enrolled consumers in programs to monitor their credit and alert them to potentially fraudulent activity. These programs were known as “Privacy Guard,” “Privacy Source,” and “Privacy Assist.” The bank began charging customers fees and interest without or before they received proper authorization from consumers.
Bank of America must pay $459 million to roughly 1.9 million customer accounts, representing approximately 1.5 million consumers who enrolled in the credit monitoring products and were charged while the bank did not perform all of the promised services.
“We have consistently warned companies about illegal practices related to credit card add-on products,” said CFPB Director Richard Cordray in a 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.”