Bank of America Fined $250M Over Junk Fees

Facts

• Bank of America (BoA) agreed Tuesday to pay $250M in fines for allegedly imposing junk fees, double-charging customers, withholding promised perks for setting up credit card accounts, and opening accounts without customers' permission.¹
• BoA, which serves 68M people and small businesses with $2.4T in consolidated assets and $1.9T in domestic deposits, will pay more than $100M to customers, $90M to the US Consumer Financial Protection Bureau (CFPB), and $60M to the Office of the Comptroller of the Currency (OCC).²
• According to the CFPB, BoA made "substantial additional revenue" for years by repeatedly charging customers $35 overdraft fees for the same transaction totaling "tens of millions of dollars" between just extra fees between March 2020 and November 2021.³
• BoA is also accused of having illegally withheld credit card bonuses, like cash rewards, from tens of thousands of customers, as well as having "illegally used or obtained consumers’ credit reports, without their permission" to secretly enroll them into credit card accounts, leading to more "unjustified fees" and damaged credit scores.⁴
• Previously, BoA was ordered to pay $727 almost 10 years ago for conducting illegal credit card practices, but the bank has been conducting its latest credit card enrollment scheme in the decade since.⁵
• Meanwhile, a BoA spokesperson said the bank "voluntarily reduced overdraft fees and eliminated all non-sufficient fund fees in the first half of 2022," which resulted in "revenue from these fees [having] dropped more than 90%."⁶

Sources: ¹New York Post, ²NBC, ³Washington Post, ⁴Daily Mail, ⁵Forbes, and ⁶FOX News.

Narratives

• Narrative A, as provided by BBC News. Junk fees have been harming customers for years, as companies consistently fraudulently lure customers in with low prices before imposing surprise, predatory, and even outright illegal fees. Not only is this unethical, but it also locks average Americans — particularly poor people — into paying more than they can afford. The government must continue its crusade against this deceptive practice.
• Narrative B, as provided by FEE. So-called “junk fees” aren't junk at all; rather, they're typical business transactions that consumers have been aware of for a long time. They can be a nuisance, but they’re not hidden, and a true free-market economy would drive them out of the process. If the government wants to look out for consumers, it can start by getting rid of hidden taxes on goods and services.