WASHINGTON (4/10/14)--Bank of America, N.A. and FIA Card Services, N.A. have been ordered to repay an estimated $727 million in relief to around 1.4 million consumers for alleged deception in the marketing of credit card add-on products.
The CFPB has also hit Bank of America with a $20 million civil penalty for allegedly charging 1.9 million consumers for credit monitoring and credit reporting services that they did not receive.
"We have consistently warned companies about illegal practices related to credit card add-on products," CFPB Director Richard Cordray said Wednesday. "Bank of America both deceived consumers and unfairly billed consumers for services not performed. We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market," he added.
The alleged deceptions took place between 2010 and 2012.
Among other things, Bank of America is said to have misled consumers about the cost of coverage provided under two credit card payment protection products, "Credit Protection Plus" and "Credit Protection Deluxe." The products were intended to help customers in times of hardship or other life events such as college or retirement.
Bank of America telemarketers reportedly also misrepresented the sign-up process for these products, leading customers to believe there were more steps involved when, in fact, they had been signed up for the products during the calls, and being charged for them. The bank allegedly also told customers that protections provided by the products would last longer than the duration stipulated under the contract, and promoted a $25,000 death benefit that was never provided.
CFPB says Bank of America also:
Under the terms of the order, Bank of America will be prohibited from marketing any credit protection or credit monitoring add-on products until it submits a compliance plan, the CFPB said. The bank will also end all unfair billing practices and repay impacted consumers.
More actions will be brought against other banks that may have misled or overcharged credit customers, a senior agency official told Politico.