Bank of America Sued Over Unauthorized Accounts, Fees
The complaint cites the Consumer Financial Protection Bureau, which levied fines and penalties against BoA this month “for this exact conduct,” as saying BoA’s employees were driven to open these accounts in response to sales pressure or to obtain incentive awards.
Because of these practices, “consumers suffered substantial concrete damages through fees charged, impacts to credit consumer profiles, the loss of control over personally sensitive and/or identifiable information,” and by spending time and effort to dig into what happened, close the accounts and watch for future harm, the complaint says.
The named plaintiff in the case, Ohio resident Nadine Ballard, learned in March this year that BofA had opened an unauthorized credit card in her name, which forced her to correct her credit report and lodge complaints with government agencies, the suit says.
BofA knew its employees routinely opened unauthorized accounts and made efforts to conceal it, the lawsuit alleges.
In its consent order this week, the CFPB said BofA had violated federal truth in lending, fair credit and consumer financial protection laws through various practices and activities, including opening credit card accounts for consumers without consent and obtaining credit reports on individuals without a permissible purpose.
BofA had no comment on the lawsuit but pointed to certain items in the CFPB order, including a comment from the bureau that, in reference to opening unauthorized credit card accounts, “these acts or practices were contrary to (BofA’s) policies and procedures and involved a small percentage of (its) new accounts.”
The bank also cited the CFPB’s comment that BofA “has addressed a root cause of Relevant Account-Opening Practices — individual sales goals and sales-based compensation — by eliminating sales goals both for compensation incentives and for performance management for financial center employees primarily responsible for the sale of consumer credit card accounts as of January 1, 2023.”
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