Bank of America, $BAC, secretly opened credit card accounts in customer names, double charged overdraft fees, and withheld promised perks from users

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Federal regulators announced on Tuesday that Bank of America had failed to deliver promised benefits to certain credit card customers, charged them excessive overdraft fees, and secretly opened credit card accounts in their names without their knowledge or consent.The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, responsible for overseeing the banking industry, imposed fines totaling $150 million on the second largest bank in the country. These fines were imposed due to what the regulators referred to as "junk fees" imposed on customers and the mishandling of customer accounts. Some customers were charged $35 in overdraft fees multiple times for a single transaction made from an account with insufficient funds.As part of the Consumer Financial Protection Bureau's enforcement, the bank will reimburse over $80 million to customers who were wrongly charged fees or denied sign-on bonuses. Additionally, customers who had credit card accounts opened in their names without their knowledge will also be compensated.These practices were brought to light during a comprehensive review, mandated by President Biden in 2022, of the fees imposed by companies on their customers. Bank of America ceased these practices, described in the regulators' actions on Tuesday, in 2021 and 2022.Rohit Chopra, the director of the consumer bureau, stated that these practices are unlawful and erode customer trust. He emphasized that the Consumer Financial Protection Bureau will take measures to eradicate these practices throughout the banking system.Regulators revealed that Bank of America improperly imposed overdraft fees by charging customers twice for the same transaction. The first charge involved a $35 penalty for "insufficient funds" when a customer attempted to make a payment through a check or automated transaction without having sufficient funds. Although the transaction would be declined, if the merchant resubmitted the payment request, the money would be processed, resulting in another $35 charge as an overdraft fee. Alternatively, the transaction could be declined again, leading to a second "insufficient funds" fee.