US 2nd Largest Bank BoA Faces 300 Billion KRW Fine for Deceptive Customer Practices

Bank of America (BoA), the second-largest bank in the United States, has been fined and ordered to pay more than 300 billion KRW in penalties and compensation to federal authorities and affected customers after it was revealed that the bank had deceived customers for years to gain unfair profits.

[Image source=AP Yonhap News]

The U.S. Consumer Financial Protection Bureau (CFPB) announced on the 11th (local time) that BoA caused harm to hundreds of thousands of customers through deceptive business practices and imposed a fine of $150 million (approximately 194.6 billion KRW). Of this amount, $90 million must be paid to the CFPB, and the remaining $60 million to the Office of the Comptroller of the Currency (OCC).

Headquartered in Charlotte, North Carolina, BoA was ordered to directly compensate affected customers with over $100 million. BoA has already paid $23 million of this amount and plans to pay an additional $80 million in compensation.

According to the CFPB’s investigation, BoA charged duplicate overdraft transaction fees of $35 per transaction from 2018 to 2022, resulting in millions of dollars in unfair profits.

BoA is also accused of illegally obtaining customers’ credit reports and secretly opening multiple credit card accounts in their names without their consent. The CFPB explained that bank employees engaged in these practices since 2012 to meet incentive targets.

Additionally, numerous cases were uncovered where the bank unjustly denied credit card customers their rightful points or cash rewards.

Previously, Wells Fargo, the fourth-largest major bank, was fined a record $1.7 billion by the CFPB in December last year after it was revealed that the bank had illegally charged fees and excessively set interest rates for customers.

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