Bank of America (BofA) has signed a $772m settlement agreement with the US Consumer Financial Protection Bureau (CFPB) to resolve the charges that it misled the customers with deceptive credit-card practices.
Additionally, the Office of the Comptroller of the Currency (OCC) fined $25m against BofA and its credit card subsidiary FIA Card Services, and ordered restitution totaling almost $459.5m to 1.9 million consumer accounts.
According to CFPB, the bank will have to pay a fine of $20m to settle the charges that it unfairly billed consumers for services pertaining to identity theft protection ‘add-on’ products.
CFPB claimed that the payment protection products were being sold out for two years, which generated hundreds of millions of dollars in revenue for BofA, while almost 1.4 million consumers were subjected to these deceptive marketing tactics.
CFPB director Richard Cordray said BofA was doing deceptive marketing and illegal billing in the market.
The bank has also agreed with the OCC to improve governance of third-party vendors associated with ‘add-on’ consumer products and submit a risk management program for ‘add-on’ consumer products marketed or sold by the bank or its vendors.