For the past few years, it was easy to get the impression that Wells Fargo was an outlier when it came to the mistreatment of customers. That bank paid billions in penalties for the creation of bogus fee-generating accounts and the application of various other types of illegitimate charges.
Now it turns out that Bank of America belongs in the same category. The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency have just announced that BofA is being fined $150 million for similar unsavory behavior.
CFPB and OCC cite abuses of three main types. First, BofA is said to have engaged in the practice that made Wells Fargo notorious: the illegal enrollment of customers in accounts without their knowledge or consent. In order to do this, BofA improperly accessed consumer credit reports.
Second, BofA deployed what the regulators call a double-dipping scheme to harvest junk fees, which included charging a customer more than once for the same declined transaction. Finally, the bank is accused of luring credit card customers with special offers of cash and points, only to renege on those promises.
Regulators were not the first to bring these swindles to light. For years, BofA was sued repeatedly in class action lawsuits brought on behalf of customers. Just last month, I reported that in a compilation of consumer-related lawsuits dating back to 2000 prepared for inclusion in Violation Tracker, BofA had paid out more in settlements and damages–$3.2 billion—than any other corporation. These payouts came in 29 different class actions, a number also higher than any other company.
It will be interesting to see if the BofA revelations generate as much controversy as did those involving Wells Fargo, which not only faced criminal as well as civil charges but also received the unusual punishment of being barred by the Federal Reserve from growing in size until it improved its compliance record. The Fed also forced out several members of the bank’s board of directors.
The consequences for BofA may be less dire. I fear that these banking abuses may be losing the ability to shock the conscience. There was, for example, little uproar last year when CFPB accused U.S. Bank of engaging in the bogus account scam and fined it $37.5 million.
BofA, for its part, may just brush off the $150 million penalty it is paying to CFPB and OCC. After all, that sum may seem insignificant to a corporation that has accumulated an astounding $87 billion in fines and settlements since 2000. That total is far and away the largest among all corporations. As shown in Violation Tracker, it is more than twice as much as has been paid by second-ranking JPMorgan Chase and it makes Wells Fargo’s $27 billion total seem puny in comparison.
Even if BofA treats this new case as no big deal, the rest of us should not become blasé about the bank’s abysmal record.