WASHINGTON, D.C. — (Mealey’s) Bank of America N.A. and FIA Card Services N.A. yesterday agreed to a Consumer Financial Protection Bureau (CFPB) consent order that requires them to pay approximately $727 million to consumers who allegedly were harmed because the bank illegally charged them for credit card “add-on” products (In the Matter of: Bank of America N.A., et al., No. 2014-CFPB-0004, CFPB).
From 2010 through 2012, Bank of America actively marketed the credit card payment protection products “Credit Protection Plus” and “Credit Protection Deluxe.”
“Both products allowed customers to request that Bank of America cancel some amount of credit card debt in the event of certain hardships like involuntary unemployment or disability and certain life events such as entering college or retirement,” the CFPB said in a press release. “The Bureau found that the telemarketing scripts Bank of America used for these products contained misstatements. Additionally, telemarketers often went off script to make sales pitches that were misleading and that omitted pertinent information. Over 1.4 million card members were affected by this deceptive marketing.”
Credit Monitoring Service
The bank also illegally charged approximately 1.9 million consumer accounts for credit monitoring and credit reporting services that they were not receiving, and the bank will pay a $20 million civil penalty to the CFPB, the CFPB said.
Bank of America enrolled consumers in the identity protection credit card add-on products “Privacy Guard,” “Privacy Source” and “Privacy Assist,” which “promised to monitor consumer credit and alert consumers to potentially fraudulent activity,” the CFPB said.
“Under federal law, in order for Bank of America or its vendors to obtain consumers’ credit information, the consumers generally must authorize access to credit information. Bank of America, however, billed consumers for these products without or before having the authorization necessary to perform the credit monitoring and credit report retrieval services,” the CFPB said.
The press release can be viewed online at www.consumerfinance.gov/newsroom/cfpb-orders-bank-of-america-to-pay-727-million-in-consumer-relief-for-illegal-credit-card-practices/.
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