The trouble Bank of America caused its customers started with so-called add on service fees that were attached to their credit card accounts. According to an April 9 explanation by the Consumer Financial Protection Bureau (CFPB). Customers will get their compensation.
An April 4 Reuters article gave the news that the settlement could have been as high as $800 million. By far, this is the largest settlement of its type.
Of particular concern were services and products like credit card debt cancellation, identity theft protection, payment protection and credit score tracking services. In some cases, the applicants believed they would have to buy the services before they could get the credit cards.
The CFPB said,
“Approximately 2.9 million consumers will be receiving or already have received up to $727 million in refunds for fees they paid for these products and services as well as additional redress.”
For consumers who think they might be eligible, the CFPB said,
“If you’re impacted by the announcement, you don’t have to take any action to receive a credit or check. If you are one of the consumers affected by the order, Bank of America should have already notified you or will notify you directly. If you have questions about whether you are entitled to a refund, you can contact Bank of America.”
Since scam artists usually feed off of such large public settlements, the bureau warns that no one should be charging fees or offering to help get the settlement money. If this happens, call (855) 411-CFPB to report the scam.
The final settlement will repay or provide other relief to consumers who were forced to pay the services. It could also include penalties that will be paid to one or more government regulators.
The problem was this: While Bank of America raked in good revenue from the services, the customers actually received little or no real protection.
The nation’s largest credit card vendors dropped the add-on schemes in 2012, but regulators wanted settlements to compensate consumers for the years before the banks dropped their questionable practices. Last year, the bureau worked out a $70 million settlement from American Express and a $389 million deal with JP Morgan Chase.
In all, the Bank of America case is the fifth settlement over such questionable credit card services.
According to an April 6 Forbes article, the Consumer Financial Protection Bureau came from Dodd-Frank Financial Reform legislation. This bureau was given unprecedented power and independence from everyone, including Congress and the President. The bureau is a section of the Federal Reserve, but does not have to account to the Federal Reserve Board when making rules and conducting litigation. It is a powerful consumer protection entity because it operates outside the political atmosphere of undue influence that banks once held over legislators and other elected or appointed officials.
Apparently, the CPFB is doing what it should be doing for the consumer, despite what detractors, lobbyists and Forbes have to say.