For a couple of years, America’s collective attention was on the serial wrongdoing of too-big-to-fail banks like Bank of America. Admittedly, while media coverage of the banks’ indiscretions has subsided in recent months, the fraudulent behaviors have not. Here are three reasons not to forget to actively hate Bank of America:
1. This week, Bank of America agreed to pay an $800 settlement for tricking customers into purchasing useless credit monitoring and protection services when they obtained credit cards. Some customers believed they were acknowledging already provided services when signing the forms for this “protection.” Others were automatically enrolled in the program without giving their approval. Consequently, BoA began billing these customers monthly for an unnecessary service.
As usual, the corporation avoided litigation by agreeing to the terms of the settlement. The bank will pay an additional $20 million to be used by the Consumer Financial Protection Bureau to provide relief for victims and produce financial educational materials. Furthermore, Bank of America will not be permitted to offer customers credit protection products again until it can prove how such programs will be fixed moving forward.
2. Months ago, whistleblowers at multiple branches of Bank of America stepped forward to reveal how the corporation told employees to lie and commit fraud in order to foreclose even on homeowners who were making honest attempts to pay their mortgages. Bankers told customers that their documents were “under review” even though they had no intention of looking at the papers until enough time had passed that they could start foreclosure proceedings. They were able to do this by intentionally “losing” (read: destroying) relevant documents and fraudulently filing reports as to why their customers were ineligible for loan modifications.
Employees were incentivized to participate in this illicit behavior, receiving a $500 bonus for securing at least 10 foreclosures in a month or gift cards to retail stores for fewer foreclosures. Those who refused to participate or provided truthful information to homeowners were fired.
3. Ultimately, the United States determined that Bank of America has been committing rampant mortgage fraud and found the company liable for $850 million in October. The government has since increased the amount it is seeking in damages to more than $2 billion since the initial figure was overly conservative considering the massive profits Bank of America collected by committing this mortgage fraud. For the record, BoA still denies the allegations, despite overwhelming of evidence.
One particular executive, Rebecca Mairone, was found liable for fraud, as well. By that point, she was out of her job at Bank of America… not for wrongdoing but to accept a position at another company: J.P. Morgan. How reassuring that, in the banking industry, fraud is considered a job well done; Mairone is now overseeing foreclosures at this new business, and we trust it’s on the up-and-up as much her previous work.
Some people assume that after the period of public scrutiny and humiliation that companies like Bank of America cleaned up their acts and established higher standards of efforts. On the contrary, their shady practices have continued, particularly since the only repercussions are financial slaps-on-the-wrist. What are we going to do now that no amount of public shaming seems to stop Bank of America from being corrupt?
Photo Credit: Mike Mozart