WASHINGTON (AP) — Bank of America Corp. is paying $772 million in fines and refunds to settle regulators’ accusations that it misled customers who bought extra credit-card products and illegally charged others for credit monitoring and reporting services they didn’t receive.
The Consumer Financial Protection Bureau and the U.S. Office of the Comptroller of the Currency announced the agreement Wednesday with the second-largest U.S. bank.
It is the largest settlement over credit card “add-ons” won by federal regulators, who have been examining the marketing of the products by the financial industry for several years. It also marked the biggest refund amount ordered to date by the CFPB, a consumer watchdog agency created by Congress in the wake of the 2008 financial crisis. The agency has operated since mid-2011.
The regulators said about 3.3 million customers were affected in the Bank of America case. They say telemarketers made sales pitches for two credit-protection products that were misleading about their costs and benefits.
Charlotte, N.C.-based Bank of America neither admitted nor denied the allegations. The bank said in a statement it already has issued refunds to the majority of affected customers. Bank of America also said it stopped selling identity-theft protection products in December 2011, and terminated in August 2012 products offering debt relief for customers who lost their jobs or suffered other hardships.
The bank marketed two credit protection “add-on” services from 2010 through 2012 that allowed customers to ask for some credit-card debt to be cancelled if they lost their jobs or suffered other hardship. The regulators said the telemarketers often went off script to make sales pitches that were misleading and left out important information. For example, some customers were falsely led to believe they’d be entitled to a $25,000 “death benefit” by taking Credit Protection Plus. Rather than being automatically awarded as portrayed, customers had to complete an approval process to receive the benefit, the regulators said.
Bank of America also was accused of billing customers for several identity-theft protection products without getting their authorization or prior to getting it. Of the $772 million in refunds, about $459 million is going to some 1.5 million consumers who enrolled in the credit monitoring products and were said to be wrongly charged.
The bank also is paying a $20 million penalty to the CFPB and a $25 million penalty to the Office of the Comptroller of the Currency, a Treasury Department agency.
“We will continue to be vigilant in pursuit of anyone who deceives or mistreats consumers,” CFPB Director Richard Cordray said in a conference call with reporters. “We intend to continue cleaning up this market as necessary to ensure that consumers are treated fairly.”
As regulators have cracked down on marketing of credit card “add-ons” in recent years, financial experts say many banks have discontinued the products.
The settlement with Bank of America was the consumer agency’s fifth agreement with a major bank over credit card “add-ons.” In September, No. 1 U.S. bank JPMorgan Chase & Co. agreed to pay $80 million in fines and about $309 million in refunds in an agreement with the CFPB and the Office of the Comptroller of the Currency for allegedly billing customers for ID theft protection they never received.
The CFPB also reached earlier settlements with American Express Co., Discover Financial Services and Capital One Financial Corp.
Shares of Bank of America rose 11 cents to $16.55 in afternoon trading. Its shares are have risen more than 5.6 percent so far this year.
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(Photo Source: PR Photos)
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This Week’s Celebrity Instagrams (10/15-10/21)
31 photos Launch gallery
1. Just a NY girl with BIG dreams....
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2. HAPPY CHILDREN=QUALITY PARENTING. We don't always see eye to eye on everything and that's normal. We're human beings. But we come together and do it right for what's important, the kids. We are not enemies, we are parents. And we are parents 1st. S/O to @monyettashaw for making Mason's bday memorable. S/O to @itscrystalsmith at home taking care of our other lil' Prince. ❤️❤️❤️ THIS IS WHAT CO-PARENTING LOOKS LIKE. #Blessed #Happy #AboveTheDrama #BiggerThanUs
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3. So happy to finally be able to share with you all that I’m the new Global Brand Ambassador for @Revlon! Follow my day on RevlonSnaps. Yay! Choose Love, Everybody! #RevlonXCiara #chooselove #ad
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4. Glam on point!!!@makeupbymotoko & @shaylinjoneshair #easybreezy @lifetimetv #beachesmovie #january2017 😘
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5. ✨True love ✨📸: @jessiemarrerophotography
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7. Today was not easy..but by the grace of God we all got through it. Words cannot express our gratitude for all of your Prayers, Positive thoughts and Support for us throughout the years. Tommy will be missed but most certainly never forgotten...And PLEASE don't ask "Where's Martin?.." he was there too...just not in this picture. Lol! God bless you all.. #LoveConquersAll #MartinShow
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9. West coast get ready for #RockyHorror. I will be live tweeting again. #letsdothetimewarpagain
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10. #THEKEYS pre order yours now ... Available everywhere #NOV22 #WeTheBest 🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑🔑
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11. We about to ROCK at #KCABlackBall!! All for our life-changing effort to end 🌎 AIDS.
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12. Today's #SNAPJACK is brought to you by @yazzthegreatest 😂😂😂💋💋💋
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13. Damn girl you kinda old to be headed to the Go Go. You coming in at the age they leaving. LMAO
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14. Daddy daycare B-Boxin with @acewellstucker @shopraisingace
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15. #FBF Naviyd & URV "LIL MONSTERS"
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16. HAPPY BIRTHDAY TO ONE OF THE BIGGEST LEGENDS IN OUR HIPHOP HISTORY! @snoopdogg CONTINUED BLESSING AND LOVE FAMILY!!!!! REAL OG!
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17. Thank you for a beautiful night VSU! Let's do it again! #HOMECOMING
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18. Had a great time this morning with my familia Erica, Griff & Truth!!
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19. Check out my interview on @essence facebook live. #inmyownwords #nycpromo #day2
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20. #She💋 #tbt #TheCoveAtTheAtlantis #DawgPawsAndAll
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21. Bae #retailtherapy
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22. Why me and @coryhardrict got the same pose... and notee... new mouth #naked
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23. When my husband is my personal 'hype-man'! it kills me every time! 💜😂 #WHATNOW #lostfiles📷
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24. Diggy Simmons
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25. Hand full of @jacquieaiche 💙💎💍 @esnail_la 💅🏾
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26. SuperSoulers! You can watch my interview with Carl Lentz live from my Facebook page, tomorrow at 11a ET| 8a PT. #SuperSoulSunday
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27. 💋 .. When the friendship is easy like Sunday morning. ☀️
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28. Sunday mornings are the best........... hugs and cuddles with my angel
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29. #huggar16 #hellohuggars
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30. My gym is everywhere!.. #RnBMoney #TheGeneral 📸: @twelvepastseven
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31. Nothing I would rather be doing... Rocko setting up our movie, Romelō working on a puzzle & Laiyah singing and sharing all she's learning at school... I'm so grateful for the joy they've brought into my life ... Praying for peace , joy & love in the home of EVERY family ♥️ #HeadScarfPJSunday LOL 😂
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