WASHINGTON (4/7/14)--Bank of America Corp. and the Consumer Financial Protection Bureau are in discussions for an $800 million settlement regarding add-on products sold to credit card holders.
The settlement is related to allegations that the bank pressed its cardholders to sign up for products that would protect them from identity theft or cancel their debt if they lost their job. The CFPB alleged Bank of America--as well as Capital One, Discover, American Express and JP Morgan Chase and Co.--misled consumers about the value of the products and marketed them in a deceptive manner (The Wall Street Journal April 4).
It would be the largest settlement to date, with much of the money going back to consumers. Litigation and criticism from regulators led Bank of America to halt selling "Credit Protection Plus" and "Credit Protection Deluxe" to new customers in 2012.
This is the most recent settlement for Bank of America regarding investigations into its past business operations. It recently agreed to pay $9.5 billion to settle mortgage claims with Fannie Mae and Freddie Mac. The state of New York received $15 million to settle a civil lawsuit by New York state Attorney General Eric Schneiderman related to Bank of America's purchase of Merrill Lynch & Co. during the financial crisis.
In both settlements, Bank of America neither admitted nor denied the allegations.