Ever wonder about those “credit card protection” services? In exchange for added fees each month, your card is supposed to be protected from identity theft. Apparently when that service was offered by Bank of America it was a scam with lots of dubious fine print. Even when the banksters offer protection it’s a predatory act.
Bank of America has now agreed to pay nearly $800 million in penalties for duping their customers into using unneeded services.
The bank will pay $268 million to reimburse about 1.4 million consumers who paid for credit protection services that they never fully received between 2010 to 2012 . Another $459 million will go to 1.5 million customers who were hit with unauthorized charges for identity protection products from October 2000 through September 2011, according to the CFPB.
The watchdog agency also slapped Bank of America with a $20 million civil penalty, which will go to the bureau’s fund for victim relief and financial literacy. The CFPB also is barring the bank from marketing any credit monitoring or protection products until it submits a plan for improving its program.
No wonder Wall Street hates the Consumer Financial Protection Bureau – having a plan for not ripping people off? Don’t these bureaucrats understand that without chiseling people Bank of America’s profits could dwindle down to nothing? It’s not like BofA is producing something of value, they profit by siphoning off money from value producing activity.
Of course Bank of America did not just dupe its customers into buying financial services they did not need, sometimes they just added on the fee-inducing service without telling the customer.
What’s more, the CFPB said, Bank of America often charged consumers for identity protection products before the bank had obtained written authorization to perform the service, a violation of the law. In some cases, the bank never received authorization but started billing customers for the service anyway.
So Bank of America used information it had about a customer’s identity to essentially steal money from them under the guise of protecting them from people who would exploit the knowledge of the customer’s identity to steal money from them. Got it.
It seems being fined hundreds of millions of dollars does not do much to force change on Wall Street, but perhaps if done continually society can win a war of attrition. If banksters can’t profit by their illegal conduct they might not engage in it. All the more reason to not let them off the hook using “Too Big To Jail” logic.