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“ Double-Dipping ” Fee Scheme
The first , and arguably one of the most critical issues raised in the CFPB and OCC ’ s enforcement actions , is related to overdraft fees . Specifically , both agencies found Bank of America was engaged in what the CFPB referred to as a “ double-dipping ” scheme . For context , the agencies observed the bank had historically charged consumers a $ 35 fee whenever a transaction was initially declined due to insufficient funds . However , the agencies later uncovered the bank was also “ double dipping ” by charging consumers multiple fees for the same transaction each time a merchant would re-present returned transactions in attempts to receive payment . Both the CFPB and OCC found this practice illegal and separately cited Bank of America violated the Consumer Financial Protection Act ( CFPA ) and Section 5 of the Fair Trade Commission ( FTC ) Act . These regulations refer to illegal practices and acts considered unfair , deceptive and abusive . They further stated the above practice caused substantial injury to consumers because they were unaware of when merchants would represent transactions and often could not stop or revoke authorizations in time to avoid subsequent charges . Moreover , they found the practices unlawful because the injuries consumers sustained from the practices did not outweigh any benefits the consumer could receive .
It is important to note the CFPB did not reference whether Bank of America provided proper disclosures of its fee practices within its consent order . They instead took the stance that the bank ’ s practice is illegal , regardless
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