Another big bank is being exposed for corporate fraud.

Bank of America will pay more than $100 million to customers for double-dipping on fees imposed on customers with insufficient account funds, withholding reward bonuses promised to credit card customers, and misusing personal information to open accounts without customers’ knowledge, the Consumer Financial Protection Bureau announced Tuesday.

The Office of the Comptroller of the Currency also found that the bank’s double-dipping on fees was illegal. Bank of America will pay a total of $90 million in penalties to the CFPB and $60 million in penalties to the OCC.

“Bank of America wrongfully withheld credit card rewards, double-dipped on fees, and opened accounts without consent,” said CFPB Director Rohit Chopra. “These practices are illegal and undermine customer trust.”

Bank of America serves 68 million people and small business clients and is the second- largest bank in the United States.

Bank of America harmed hundreds of thousands of consumers over a period of several years and across multiple product lines and services. Specifically, Bank of America:

• Deployed a double-dipping scheme to harvest junk fees: It had a policy of charging customers $35 after the bank declined a transaction because customers didn’t have enough funds in their accounts. The CFPB’s investigation found that the bank double-dipped by allowing fees to be repeatedly charged for the same transaction.
• Withheld cash and points rewards on credit cards: It illegally withheld promised credit card account bonuses, such as cash rewards or bonus points, to tens of thousands of consumers. The bank failed to honor rewards promises for consumers who submitted in-person or over-the-phone applications. It also denied sign-up bonuses to consumers due to the failure of its business processes and systems.
• Misused sensitive customer information to open unauthorized accounts: From at least 2012, bank employees illegally enrolled consumers in credit card accounts to reach sales goals. They illegally used consumers’ credit reports to complete applications. Consumers were charged unjustified fees, suffered negative effects to their credit scores, and had to spend time correcting errors.

This is not the first enforcement action Bank of America has faced for illegal activity. Other enforcement action includes:

• In 2014, the CFPB ordered the bank to pay $727 million back to its victims for illegal credit card practices.
• In May 2022, the CFPB ordered the bank to pay a $10 million penalty over unlawful garnishments,
• In July 2022, the CFPB and OCC fined the bank of $225 million and required it to pay hundreds of millions of dollars back to consumers for botched disbursement of state unemployment benefits at the height of the covid-19 pandemic.

The action by the CFPB shows that the creation of fake accounts by Bank of America is just the latest in a string of fake account scandals.

Regulators fined Wells Fargo for a sales culture that led to the creation of 3.5 million fake accounts in 2016. In addition, U.S. Bank paid a $37.5 million fine in 2022 for signing up customers for unauthorized accounts.

So, again, beware of large banks. Try a local credit union instead.