(Adds comments from CFPB director, Bank of America)
By Emily Stephenson and Peter Rudegeair
WASHINGTON, April 9 Bank of America
agreed to pay nearly $800 million in fines and restitution to
settle allegations of deceptive marketing and unfair billing
involving credit card products, U.S. regulators said on
The Consumer Financial Protection Bureau and Office of the
Comptroller of the Currency said they had ordered the bank to
pay $727 million in relief to consumers to resolve problems with
add-on products providing identity theft and payment protection
The bank must also pay fines of $20 million to the bureau
$25 million to the OCC.
"We have consistently warned companies about illegal
practices related to credit card add-on products," bureau
Director Richard Cordray said in a statement. "We will not
tolerate such practices and will continue to be vigilant in our
pursuit of companies who wrong consumers in this market."
The consumer bureau said the bank had misled roughly 1.4
million people about the cost of two credit card payment
protection products, which allow consumers to suspend minimum
card payments if they lose their job or suffer a severe illness,
and the amount of time they would receive benefits from them.
The bank also billed customers for identity protection
products before they received them and did not provide some
fraud-monitoring services consumers thought they were buying,
regulators said. About 1.9 million people were unfairly billed,
the consumer bureau said.
Bank of America neither admitted nor denied wrongdoing, the
Bank of America said in an emailed statement that it had
stopped marketing its identity theft protection products in
December 2011 and its payment protection products in August
2012. The bank has also already issued refund payments to most
customers who were affected, the statement said.
In recent years, the bureau has been cracking down on credit
card companies offering payment protection, credit score
tracking and other add-on products. The settlement with Bank of
America is the bureau's fifth such case, Cordray said.
Since 2012, Capital One Financial Corp, American
Express Co, Discover Financial Services and
JPMorgan Chase & Co all have paid fines to resolve
allegations of unfair practices involving such products.
(Reporting by Emily Stephenson and Peter Rudegeair, Editing by
Franklin Paul and Lisa Von Ahn)