Thursday, April 3, 2014

Bank of America close to settling over credit card add-ons, reports say

Bank of America is close to reaching a settlement with a U.S. regulator over products it sold as add-ons to credit cards, according to news reports Thursday.

The Wall Street Journal, citing people familiar with the matter, reported that the bank is in talks to pay more than $800 million to settle with the Consumer Financial Protection Bureau. The settlement would be the CFPB's largest ever with a financial institution, the WSJ reported. A deal could be announced in the coming days, according to the story.

A spokesman for the CFPB declined to comment when reached by the Observer. A Bank of America spokeswoman also declined to comment.

The Charlotte bank has been under scrutiny over the sale and marketing of credit card products that offered consumers debt cancelation in the event of a hardship like a job loss and identity-theft protection.

Bank of America no longer offers the products.

In January 2013, a judge approved a $20 million settlement to compensate customers who bought Bank of America's Credit Protection Plus product. Customers paid monthly fees in exchange for credit card payments being canceled in the event of a job loss or other hardship. The settlement affects customers who claimed, among other things, that they were signed up for the product without their consent or that the product was not as advertised.

In an August securities filing, the bank disclosed that it has been in talks with regulators to "address concerns" about the sale and marketing of credit card debt-cancellation products.

In a filing in 2012, the bank said regulators were looking at its identity theft-protection services. Regulators were interested in "customers who may have paid for but did not receive certain of such services from third-party vendors" of the bank and "whether appropriate oversight existed."


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