Bank of America was slapped with fines totaling $225 million for improperly withholding unemployment benefit payments at the height of the pandemic.
” Bank of America automatically and illegally froze people’s accounts through a flawed fraud detection program, then gave them little recourse when there was, in fact, no fraud“, said in a press release the Financial Consumer Protection Bureau (CFPB), which imposed a penalty of 100 million dollars.
The bank broke the rules on illegal and deceptive practices and demonstrated deficiencies in the management of its operations, for its part advances the Office of the Comptroller of the Currency (OCC), which imposed a penalty of 125 million.
The two agencies also ordered Bank of America to reimburse the injured parties and to pay them a sum for “reparation”.
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Bank of America administered the prepaid credit cards intended to facilitate the payment of unemployment benefits and other aid put in place at the start of the pandemic for people suddenly out of work in several American states.
The agencies mainly accuse the establishment of having replaced the normal investigation processes in the event of suspected fraud with a filter that automatically froze accounts according to certain criteria, and of not having put in place the necessary means to easily allow account holders to challenge the decision.
” The bank let the holders of these prepaid cards down by denying them access to unemployment benefits at the height of the pandemic, and leaving them in a vulnerable situation by not offering them effective means to remedy the situation.“, commented the boss of the OCC, Michael Hsu.
Bank of America points out for its part that it has distributed more than 250 billion dollars in aid to more than 14 million people during the pandemic, “ more than any other bank ” in the USA.
She also recalls that the vast aid program paid by the government to deal with the consequences of the spread of Covid-19 has given rise to ” unprecedented criminal activity“.