Last month, the Consumer Financial Protection Bureau (“CFPB”) issued a consent order to Bank of America, N.A. and FIA Card Services, N.A. (“BOA”) instructing them to pay an estimated $727 million in relief to consumers harmed by deceptive marketing of credit card add-on products. According to the CFPB, the relief will spread to approximately 1.4 million consumers. Additionally, BOA will pay $20 million to the CFPB as a civil money penalty.
BOA marketed two credit card payment protection products, “Credit Protection Deluxe” and “Credit Protection Plus” from 2010 through 2012. According to the CFPB, these products were marketed as an opportunity to reduce incurred debt if certain hardships occurred in the future, such as disability or involuntarily unemployment. Allegedly, the bank misled its customers about the enrollment process for the credit protection products, the cost of the first 30-day coverage, and the benefits of credit protection products.
The CFPB also ordered BOA to submit a compliance plan to the CFPB concerning these products and services and prohibited the bank from marketing any credit monitoring or credit protection add-on products in the interim. CFPB Director Richard Cordray commented:
“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.”
This enforcement action originally arose as a result of an investigation began by the Office of Controller of the Currency (“OCC”) in connection with the unfair billing practices of the identity protection credit card products. The OCC has also ordered BOA to pay $25 million in civil money penalties for unfair billing practices.
For more information regarding this enforcement action, the CFPB or CFPB compliance, you may contact Nicole Strickler at (312) 334-3442 or at email@example.com.