Bank Of America To Pay $772 Million For Deceptive Card Practices

Discussion in 'Stock Market Forum' started by PaulSchinider, Apr 10, 2014.

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    Apr 10, 2014
  1. PaulSchinider

    PaulSchinider Well-Known Member

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    Bank of America Corporation has reached a settlement with bank regulators to pay $772 million in fines and customer refunds for its deceptive credit card practices

    Bank of America Corporation (BAC) reached a settlement with US regulators yesterday, over allegations that it misled more than a million customers into buying credit card protection products they did not need. Under the terms of the settlement, the financial giant will pay a total of $772 million in penalties, of which $45 million will be paid in fines, while $727 million will be refunded to customers.

    The latest settlement over deceptive card practices was announced by the Consumer Financial Protection Bureau (CFPB), the bank regulator that protects consumer interests, which will receive $20 million of the fines from Bank of America. The remaining $25 million will be paid to the Office of Comptroller of the Currency.

    CFPB Director Richard Cordray stated: “We have seen several cases of deceptive marketing and illegal billing in this market. Here, Bank of America was doing both.”
     
    PaulSchinider, Apr 10, 2014
    PaulSchinider, Apr 10, 2014
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    2. Apr 11, 2014
  2. Franco

    Franco Member

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    This doesn't surprise me. Everyone, including BOA, always tries to sell people stuff they don't need. Card protection is yet another phony practice. A false (and expensive) sense of security.
     
    Franco, Apr 11, 2014
    Franco, Apr 11, 2014
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    3. Apr 11, 2014
  3. wanderingwildman

    wanderingwildman Well-Known Member

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    Those credit card protection products almost always represent a scam. I always stay away from them. I also never liked BO. Their NSF fees, and a few other charges seemed to be excessive when I had an account with them.
     
    wanderingwildman, Apr 11, 2014
    wanderingwildman, Apr 11, 2014
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    4. Apr 11, 2014
  4. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Chase is very "predatory" as well - I worked for them briefly many years ago.
     
    JR Ewing, Apr 11, 2014
    JR Ewing, Apr 11, 2014
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    5. Apr 14, 2014
  5. Hank City

    Hank City New Member

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    Beware of balance transfers as well, take it from someone who was victim to several of their deceptive practices.
     
    Hank City, Apr 14, 2014
    Hank City, Apr 14, 2014
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    6. Apr 14, 2014
  6. HeinrichM

    HeinrichM Active Member

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    It is good to see that the bank regulators are actively protecting consumers. Banks have always tried to find new ways of getting their customers to spend more money. Hopefully this result will make the banks think twice in future.
     
    HeinrichM, Apr 14, 2014
    HeinrichM, Apr 14, 2014
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    7. Apr 14, 2014
  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Institutions should be required to disclose anything and everything both verbally and in writing in plain and simple language. And if a customer is not capable of understanding what will happen or could happen, the institutions probably shouldn't be offering products (and possible consequences of such products) not understood by such a customer to such a customer.

    And if the products are not right for the particular customer and not in their best interest, they should not be offered to such a customer. A person trying to get by on $600 in social security and $200 in food stamps shouldn't be pushed into a $300 or more mortgage (or ARM) or savings account that charges $10 a month if the minimum balance < $200, or charged $6 a month for a standard checking account.

    And these fees need to be disclosed verbally beforehand and not just after the fact in fine print buried within a stack of papers handed to the customer before rushing them out the door.
     
    JR Ewing, Apr 14, 2014
    JR Ewing, Apr 14, 2014
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    8. Apr 14, 2014
  8. tinkerbell

    tinkerbell Member

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    Predatory in what way? BofA deserves it. Shouldn't most or all of them get fined as well?

    I know some (or probably most) credit card companies even sell their client information to third parties. I sometimes get anonymous callers that try to sell me anything.

    Regulators should continue to pressure these institutions so they know that they can't always have it their way.
     
    tinkerbell, Apr 14, 2014
    tinkerbell, Apr 14, 2014
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    9. Apr 15, 2014
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I could write a book on how they were / are predatory, lol. And on the institutional level - not just on the lowest retail levels.

    Not verbally disclosing fees on retail banking products, putting clients into inappropriate products to generate revenue, lying to clients and failure to disclose things on investment and insurance products like annuities that carry large fees and long surrender periods, etc.
     
    JR Ewing, Apr 15, 2014
    JR Ewing, Apr 15, 2014
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    10. Apr 15, 2014
  10. Annabell

    Annabell Well-Known Member

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    Not surprised that they have done this, probably not the first bank to do it, but I'm glad that they've payed people back for the iffy practices and sales.
     
    Annabell, Apr 15, 2014
    Annabell, Apr 15, 2014
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