Forbes - Another big bank in hot water

Your Weekly Advisor Update

A Note From Natalie:

Bank of America just got hit with a $250 million fine for a host of illegal activities. The Consumer Financial Protection Bureau (CFPB) accused Bank of America of several wrongdoings including double-dipping on insufficient funds fees, withholding credit card rewards and opening accounts without permission. (If this sounds familiar, it’s because a fellow big bank, Wells Fargo, was held responsible for similar practices.) 

In this newsletter, we dig into what Bank of America did, how much they owe and who might be getting compensation from harm (check your account or mailbox for checks).

Not-so-fun fact: This is the third time in about a year that the banking giant has been ordered to pay penalties and redress to customers for mishandling customers’ finances, including unlawful wage garnishments and a slipshod effort to disperse unemployment benefits. 

If anything, this is a reminder not to put your finances on autopilot. Keep tabs on your account statements to make sure everything is in order.

If you have any news tips, story ideas or questions, respond to this email.

Have a beautiful day!

Natalie

Natalie Campisi

Senior Staff Writer

Consumer Finance

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Bank of America Must Pay $250 Million For Illegal Card Tactics, Junk Fees

With more than 68 million customers and $1.9 trillion in domestic deposits, Bank of America illicitly collected hundreds of millions of dollars by charging a $35 nonsufficient funds fee on purchases already declined by the bank. This scheme went on for nearly four years. 

This wasn’t their only offense. The CFPB accused Bank of America of withholding cash and points on rewards credit cards and using customers’ information to open unauthorized accounts.

The CFPB has been doggedly holding financial institutions accountable for misconduct and illegal practices over the past couple of years. The charges against Bank of America are reminiscent of when the bureau charged Wells Fargo with unlawful practices in 2016, including opening millions of customer accounts without consent.

If you were harmed by Bank of America, you may get compensation via direct deposit or a check. Bank of America must pony up $80.4 million to customers who were harmed by them. The bank previously issued an estimated $23 million to customers who were denied rewards bonuses.

Here’s what else you should know
this week:

Biden Plan Cancels $39 Billion In Student Loans For More Than 800,000 Borrowers. Do You Qualify? 

Roughly 804,000 borrowers will see $39 billion of federal student loan debt forgiven in a matter of weeks, under a new program announced by the Biden Administration on July 14. Here’s who qualifies.

IRS Collection Notices Go Out To 1 Million Taxpayers By Mistake; Disaster-Related Extensions Still Apply 

You may have gotten an unexpected collection notice from the IRS requiring you to submit your payment for balances owed sooner than expected. For millions of taxpayers in areas affected by natural disasters, the IRS granted an automatic extension for filing and paying taxes—so if that’s you, you can ignore the letter. We break down what happened and who’s exempt here.

Worst Airports And Airlines For Lost And Damaged Luggage, Ranked 

If you’re traveling through these airports, bring your hardshell luggage. Forbes Advisor compared the nation’s 100 busiest airports across four key metrics using data from the TSA to find out which airports are the worst for checked baggage.

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