Bank of America fined $225m for ‘botched’ US COVID-19 aid payments

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Photo shows Bank of America tower which is fined by US agencies for "rush" US COVID-19 relief programs

An aerial view of the Bank of America Tower is seen in New York on August 5, 2021 (Photo by Kena Betancur / AFP)

New York, United States – Two US agencies have fined Bank of America (BofA) a total of $225 million for wrongfully freezing unemployment and other public benefit programs at the height of the coronavirus pandemic. COVID-19.

The Consumer Financial Protection Bureau fined BofA $100 million for “botched” disbursement of state unemployment programs during COVID-19, the agency said.

“Bank of America automatically and illegally froze people’s accounts with a flawed fraud detection program, then gave them little recourse when there was, in fact, no fraud,” the agency said. in a press release.

The Office of the Comptroller of the Currency fined the BoA $125 million for “violations of law and unsafe or unsound practices” in administering the bank’s public benefit programs.

The agencies also demanded that the US bank provide payouts to these unfairly private payments.

The consumer protection agency said BofA during the pandemic changed its credit card fraud investigation practices, replacing a “reasonable” investigation with a fraud screening system that automatically triggered an account freeze. .

The bank also “made it very difficult” to unfreeze the accounts, the agency said.

“The bank let these prepaid cardholders down by denying them access to their mandatory unemployment funds at the height of the pandemic, and leaving these vulnerable consumers without an effective way to remedy the situation,” the Comptroller said. of the OCC, Michael Hsu.

Bank of America defended its role during the pandemic, saying it facilitated the payment of more than $250 billion in pandemic funds to more than 14 million people.

Government pandemic programs “created unprecedented criminal activity where illegal applicants were able to trick states into approving tens of billions of dollars in payments,” a BofA spokeswoman said.

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