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Bank of America will pay more than $250 million in refunds and fines after federal regulators found the company systematically overcharged customers, withheld promised bonuses and opened accounts without customer approval.

The Consumer Financial Protection Bureau found the bank made “substantial additional revenue” for years by repeatedly charging customers $35 overdraft fees on the same transaction.

The bank also denied cash and points bonuses it had pledged to tens of thousands of credit card customers. And starting in 2012, Bank of America employees enrolled customers in credit card accounts without their approval, obtaining credit reports without permission to complete the applications, the bureau said.

“These practices are illegal and undermine customer trust,” CFPB Director Rohit Chopra said in a statement. “The CFPB will be putting an end to these practices across the banking system.”

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The company is paying more than $100 million in restitution to customers, a $90 million fine to the CFPB and another $60 million fine to the Office of the Comptroller of the Currency.

Bank of America already has refunded customers denied credit card rewards and bonuses, the consumer bureau said. It will be repaying those it overcharged on fees by depositing funds into their account or sending a check. The bank will identify a contact for consumer questions later this month, and the CFPB will post it online, the bureau said.

Hundreds of thousands of customers were harmed over several years, the consumer agency said. Bank of America is the second largest U.S. bank, with 68 million residential and small business customers.

The company did not admit or deny wrongdoing in its settlement with the agency or in a separate agreement with the OCC.

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Bill Halldin, a bank spokesman, said the company has trimmed its revenue from overdraft and insufficient fund fees by more than 90 percent since cutting them in the first half of 2022.

In extra fees alone, the bank charged customers “tens of millions of dollars” between March 2020 and November 2021, federal regulators found.

The regulator said Bank of America in that period hit customers with a $35 fee if they had insufficient funds to cover a charge. If the customer still lacked funds when the merchant resubmitted the transaction, the company assessed another $35 penalty. The OCC said a “reasonable customer” was unlikely to understand they could be subject to multiple fees in such a scenario.

The CFPB said Bank of America also misled its credit card customers on two fronts. The company promised cash and bonus rewards to new credit card customers, then only honored them for people who signed up online and not those who enrolled via phone or in person.

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And bank employees opened credit card accounts for customers without their knowledge in a bid to meet individual sales goals, the CFPB said. The accounts may have saddled those customers with fees, dinged their credit scores and cost them control of personal identifying information, the bureau said.

The CFPB said the Bank of America “addressed a root cause” of that practice by eliminating sales goals and sales-based pay at the beginning of 2023, and the CFPB noted the fakes made up a small percentage of the bank’s new accounts.

Still, the practice has given the banking industry a major black eye in recent years. Wells Fargo reached a $3.7 billion settlement with federal regulators in December over a range of violations, including opening millions of fake accounts. The CFPB fined U.S. Bank $37.5 million last summer over its own sham accounts scandal.

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This is not Bank of America’s first brush with federal regulators over its treatment of customers. The CFPB ordered the company to pay $727 million in 2014 over illegal credit card practices. The company paid another $225 million last year in fines over mishandling state unemployment benefits during the pandemic and a separate $10 million civil penalty over unlawful garnishments.

“Bank of America has clearly broken the law in yet another case of Wall Street banks taking Americans’ money to pad their already-massive profits,” Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said in a statement. “This is just the latest in a long line of illustrations of why we can’t trust Wall Street to do the right thing.”

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