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Bank of America agrees credit card services settlement

Article By: ,  Financial Analyst
April 10, 2014 12:15 PM

The share price of Bank of America rose in the US last night (April 9th), despite the bank confirming it is going to pay a massive settlement over accusations it misled customers.

Bank of America announced it is to pay $783 million (£470 million) in fines and refunds as a result of customers being misled over its credit card services.

The US Consumer Financial Protection Bureau said in a statement released to announce the settlement that the bank had been "unfairly billing consumers" over its identity theft protection product. The body also stated that Bank of America was guilty of "using deceptive marketing and sales practices" for the credit protection add-ons it sold to members of the public.

People who are affected by the refunds do not have to take any action, as Bank of America ought to have already notified them, or will be doing so in the near future.

The US Consumer Financial Protection Bureau added: "Bank of America has already completed reimbursement for the "identity theft protection" eligible consumers, so eligible consumers should have already received refunds. If you have questions about receiving a refund for this product, you can contact Bank of America."

Product sales

Bank of America confirmed in a brief statement that it has agreed a settlement following discussions with both the US Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

It was pointed out by the bank that the identity theft products in question have not been sold by the bank since December 2011, while it ceased offering credit card debt cancellation products in August 2012.

The share price of Bank of America rose by more than one per cent in the US yesterday, adding a further 0.36 per cent of growth in after-hours trading on the New York Stock Exchange.

This latest settlement comes only a couple of weeks after Bank of America confirmed it would be paying $9.5 billion to settle charges filed against it by the Federal Housing Finance Authority over the US housing crisis. The body had accused Bank of America of misleading US mortgage lenders.

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