The Check's in the Mail

$100 million coming to Bank of America victims

Financial Fraud Roundup - Friday, July 21, 2023

Photo by Mathyas Kurmann on Unsplash

Last week, I reported on a $250 million penalty handed out to Bank of America for various schemes that defrauded their customers.

Banking Behemoth Hit with $250 Million Fine for Fraud

$100 million of that penalty goes directly to consumers who were wronged.

As reported on NewsBreak, $80 million of those payments are for illegal overdraft charges incurred when Bank of America “double-dipped” and charged customers multiple times for the same overdraft transaction.

The bank will refund more than $80 million to customers. If you are one of those customers, the refund will be made directly to your account. Former Bank of America customers will receive refunds in the mail.

Another portion of the refund will go to customers who had credit accounts opened without authorization. Bank of America will also have to correct entries on credit reports that resulted from these fake accounts.

Bank of America, the nation’s second-largest bank with 68 million customer accounts, has paid more than $1 billion in fines, penalties, and refunds since 2014 for illegal activity.

Turns out, that lease-purchase (rent-to-own) financing is a terrible idea

A company that provides financing to thousands of merchants using lease-purchase or rent-to-own financing agreements is being sued for using deceptive and illegal tactics.

These schemes can result in consumers paying double or more of a product’s value, and Snap Financial was eager to sign customers up and used deceptive marketing to do so. What’s worse, when the customers couldn’t pay or tried to get out of the agreements, Snap used illegal threats to attempt to collect debts.

Here’s more:

According to the CFPB, Snap Finance aggressively marketed its financing with advertisements that misled consumers as to the nature of the financing arrangement and failed to disclose the true costs customers would incur. In-store promotional materials provided by Snap Finance advertised a “100 Day Cash Payoff,” which led consumers to believe they had entered into a 100-day financing agreement. In fact, consumers were automatically entered into 12 months of payments, which typically involve total payments that amount to more than double the cash price of the financed merchandise or service.

The company also engaged in aggressive and illegal collections practices, including making threats of legal action and including misrepresenting customer payment obligations, even attempting to collect from customers who had already completed their payments or from customers who had not yet received their product.

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