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 (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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