Bank of America fined for deceptive practices

July 11, 2023 12:50 PM PDT | By Invezz

Bank of America fined for deceptive practices — Image source: Invezz

Bank of America to pay $150 million in fines

CFPB accused the financial services behemoth today of charging an overdraft fee of $35 to its customers, multiple times for the same transaction.

It charged the investment bank with holding back rewards from credit card users and opening accounts without customer authorisation as well.

To that end, the regulator ordered Bank of America on Tuesday to cough up $150 million in fines. The multinational will also pay another $80.4 million in compensation to customers for junk fees, as per the CFPB.

The announcement arrives only days after the multinational raised its quarterly dividend as Invezz reported here.

Senior industry expert reacts to the news

The Consumer Financial Protection Bureau reiterated its commitment to eliminating such deceptive practices on Tuesday. Last December, Wells Fargo was also made to pay over $2.0 billion in restitution to customers.

Still, Ted Rossman – an industry analyst at Bankrate expects the all-in cost to remain the same for consumers as eliminating one fee only tends to birth another.

Overdraft fees are a good example of a game of whack-a-mole when it comes to fees.

Bank of America Corp is scheduled to report its Q2 earnings next week. Consensus is for it to earn 85 cents a share this quarter versus 73 cents per share a year ago. At writing, BAC is down roughly 20% versus its year-to-date high.

The post Bank of America fined for deceptive practices appeared first on Invezz.

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