Bank of America Busted for Opening Fake Bank Accounts: $250 Million Fine, No Jail Time for Anyone

Bank of America Busted for Opening Fake Bank Accounts: $250 Million Fine, No Jail Time for Anyone

Bank of America

Bank of America chairman and CEO Brian Moynihan attends a World Economic Forum panel in Davos, Switzerland, Jan. 23, 2018. (AP /Markus Schreiber)

Bank of America has been ordered to pay $250 million in refunds and fines after the government found that the second-largest U.S. bank systematically overcharged customers $35 overdraft fees on the same transactions and opened accounts without their permission.

The bank double-dipped on fees for customers with insufficient funds in their account, withheld reward bonuses promised to credit card customers, and misappropriated sensitive personal information to open accounts without customer knowledge, the Consumer Financial Protection Bureau reported.

Bank of America appeared to act with impunity. Others in the banking world have been charged with similar offenses.

BofA was accused and fined for illegal activity in 2014 ($727 million to its victims for illegal credit card practices) and twice in 2022 — $10 million civil penalty over unlawful garnishments and $225 million in redress to consumers for botched disbursement of state unemployment benefits during the covid pandemic.

Wells Fargo reached a $3.7 billion settlement with federal regulators in December over violations including opening millions of fake accounts. The CFPB fined U.S. Bank $37.5 million in 2022 over its own fake accounts scandal, Washington Post reported.

BofA’s practices violated the prohibition on unfair and deceptive acts or practices, the Fair Credit Reporting Act, and the Truth in Lending Act, according to the U.S. government.

For redress, the BofA has been ordered by CFPB to “stop its repeat offenses,” “Pay redress to harmed consumers,” and pay “$90 million in penalties to the CFPB.”

There are about five times more white people in the U.S. than Black, according to the census, yet Black Americans are imprisoned at about five times the rate of white. The U.S. prison population has grown nearly 500 percent in the past 50 years.

“We live in what some call a golden era of white-collar crime,” Robin Kaiser-Schatzlein wrote for New Republic. “While the FBI obsessively measures other crime, it does not have a comprehensive gauge of corporate fraud, executive fraud, tax evasion, or embezzlement. It’s not because it is less costly or because wealthy professionals inflict less harm.”

Street-level crimes such as burglary, larceny, and theft cost victims around $16 billion, while white-collar crime costs victims $300 billion to $800 billion per year, according to Jennifer Taub, a professor and author of the book, “Big Dirty Money.”

“It is clear that the outcome of mass incarceration today has not occurred by happenstance but has been designed through policies created by a dominant white culture that insists on suppression of others,” wrote Dr. Ashley Nellis, co-director of research at The Sentencing Project.

A Washington, D.C.-based research and advocacy, The Sentencing Project works for effective and humane responses to crime and promotes racial, ethnic, economic, and gender justice.