by Christopher Freeburn | April 10, 2014 9:10 am
On Wednesday, the U.S. Consumer Financial Protection Bureau and the Comptroller of the Currency announced that they had reached a settlement with Bank of America (BAC) over allegations of misleading sales practices linked to credit card accounts.
Under the deal, federal officials say BAC will refund $727 million to customers affected by the improper practices. BAC will also pay civil fines of $45 million. Federal regulators tally BAC’s total payments under the settlement at $772 million. BAC, however, says the refunds and penalties will amount to $783 million, USA TODAY notes.
BAC said it has already issued most of the refunds. The settlement amount was consistent with what BAC had anticipated, a bank spokesperson said.
Federal regulators say that BAC tricked about 1.4 million customers into purchasing credit card debt payment-protection programs, deceiving them about the true cost of the services. BAC also sold identity-theft protection services to 1.9 million customers, but did not deliver the services as promised, and began charging for the service before customers had agreed to it.
BAC no longer offers the services covered under the settlement.
The government has reached similar settlements with JPMorgan (JPM), Discover Bank (DFS) and Capital One (COF).
BAC stock rose slightly in Thursday pre-market trading. Over the past 12 months, BAC shares have gained more than 30%.
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