Bank of America fined $30 million for improper debt-collection practices | Business News

Bank of America fined $30 million for improper debt-collection practices

31 May 2015 | Author: | No comments yet »

Bank of America Fined for Violations of Military Relief Law.

Bank of America Corp has been fined US$30 million by US regulators, who accused the bank of violating consumer protections for members of the military in collecting debts.

The bank is one of several institutional companies that agreed to review their records to identify borrowers who were eligible for additional protections under the Servicemembers Civil Relief Act. The Office of the Comptroller of the Currency (OCC), a US Department of the Treasury division, on Friday announced the civil penalty against the second-largest US bank. Among other things, the act allows military personnel called to active duty to have their mortgage rates capped at 6% and protects them from nonjudicial foreclosure and repossession. The agreement covers the bank’s practices dating to at least 2011 tied to credit card and deposit overdraft collections litigation and account servicing for customers who were protected under the act. The regulators said the bank violated the law protecting service members by taking improper legal action against military customers for delinquent credit-card accounts and overdrafts.

In trying to collect on debts, the bank’s employees filed affidavits that were said to be based on personal knowledge or a review of records when they were not, according to the O.C.C. The bank did not admit to the O.C.C.’s findings but said that it had been taking steps to improve its monitoring and compliance since it discovered the issues in 2011. “We have taken significant steps over the last several years, and will take further steps now, to ensure we have the right controls and processes in place to meet — and exceed — what is required by law and what our military customers deserve and expect,” Andrew Plepler, Bank of America’s executive for global corporate social responsibility and consumer policy, said in a statement. For instance, the bank filed affidavits in which the person preparing the document claimed they had reviewed records related to the case when in many instances they had not, the regulator said. Justice Department announced the bank would pay roughly $36.8 million to military service members whose homes were illegally foreclosed upon from 2006 to 2010.

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