Consumer complaint received 2024-04-12 00:00:00
Product: Prepaid card — Government benefit card
Issue: Unexpected or other fees — 
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: MD

Complaint narrative:
Formal Complaint Against Bank of America 's Persistent Violations of Enforcement Action ( Reference : XXXX ) I am writing to file a formal complaint against Bank of America regarding their repeated attempts to circumvent the enforcement action issued on XX/XX/XXXX. Since XX/XX/XXXX, Bank of America has continuously obstructed the processing of redress as described in the aforementioned enforcement action. 

The enforcement action, which pertains to " Affected Consumers '' during the Relevant Period from XX/XX/XXXX, to XX/XX/XXXX, outlines specific criteria defining those impacted. " Affected Consumers '' are individuals who qualified for and received government unemployment insurance benefit payments electronically through prepaid debit cards issued by Bank of America, filed a notice of error concerning alleged unauthorized Electronic Fund Transfers ( EFTs ), and had Bank of America incorrectly determine, solely based on the results of their Fraud Filter, that no error occurred. Consequently, Bank of America denied error claims, reversed granted credits, and froze or blocked affected consumers ' accounts, causing consequential financial harm. 

The core issue arises from Bank of America 's utilization of a faulty Fraud Filter to investigate claims, which was implemented between XX/XX/XXXX, and XX/XX/XXXX. Instead of conducting thorough investigations, Bank of America solely relied on this automated process, disregarding established protocols under the Electronic Fund Transfer Act ( EFTA ) and Regulation E. This change in practice occurred despite the surge in error notices filed by prepaid debit cardholders nationwide in the summer of XXXX. 

Moreover, Bank of America failed to address the inadequacies of its Fraud Filter, despite recognizing the potential for erroneous determinations. Internal documentation from XX/XX/XXXX acknowledges the impracticality of solely relying on the Fraud Filter due to the volume of accounts flagged. 

This contravenes the requirements stipulated in Sections 908 and 909 of the EFTA, 15 U.S.C. 1693f and 1693g, and Section 1005.11 of Regulation E, which mandate that upon notification of an error, a financial institution must conduct a thorough investigation and report its findings to the consumer. Bank of America 's deviation from these regulations has led to significant harm inflicted upon affected consumers, constituting a breach of trust and regulatory compliance. 


The events outlined in the enforcement action paint a troubling picture of Bank of America 's disregard for the financial well-being of its customers. The decision to automate error resolution investigations through the Fraud Filter, without conducting thorough reviews, has had devastating consequences for many individuals.

Consumers whose accounts were frozen based solely on the Fraud Filter indicators experienced significant delays in accessing their unemployment insurance benefits. These delays led to financial distress, including the accrual of late fees, interest charges, and missed payments on essential bills such as phone and utility bills. Additionally, some consumers faced severe consequences such as foreclosure, eviction, and car repossession due to the prolonged freezing of their accounts. 

The findings and conclusions outlined in the enforcement action highlight Bank of America 's failure to fulfill its obligations under the Electronic Fund Transfer Act ( EFTA ) and Regulation E. According to these regulations, financial institutions are required to conduct a " good faith investigation '' and review their own records regarding alleged errors. Bank of America 's reliance on the Fraud Filter alone, without any further investigation or consideration of relevant information, directly contravenes these requirements. 

Between XX/XX/XXXX, and XX/XX/XXXX, Bank of America 's use of the Fraud Filter resulted in the automatic determination of no error for approximately XXXX notices of error submitted by Affected Consumers nationwide. This wholesale dismissal of consumer claims without adequate investigation constitutes a clear violation of regulatory standards. 

Despite the clear directives outlined in the consent order issued on XX/XX/XXXX, Bank of America persists in its non-compliance with regulatory requirements and corrective measures. The provisions set forth in the order explicitly prohibit the bank and its agents from violating Sections 1031 and 1036 of the Consumer Financial Protection Act ( CFPA ), as well as Sections 908 and 909 of the Electronic Fund Transfer Act ( EFTA ), and Section 1005.11 of Regulation E. Additionally, affirmative actions were mandated to ensure proper administration of unemployment insurance benefit prepaid debit cards and accounts. 

However, it is evident that Bank of America has failed to adhere to these mandates. The bank continues to determine no error solely based on the results of its automated fraud filter, despite explicit instructions to the contrary. Furthermore, accounts are still being frozen solely based on the outcomes of this flawed automated process. 

In direct violation of the consent order, Bank of America has neglected to consider all relevant information during error resolution investigations. Instead, it persists in relying solely on automated procedures, disregarding the importance of reviewing pertinent data within its own records. 

Moreover, the bank has not complied with requirements regarding the verification of identity for EDD Cardholders and the facilitation of identity re-verification processes. Access to open EDD Prepaid Debit Card Accounts is being improperly conditioned, and necessary procedures for identity re-verification have not been adequately established. 

Additionally, Bank of America has failed to conduct a risk assessment of its Prepaid Card Unemployment Insurance Benefits Program, as mandated by the consent order. This failure underscores the bank 's lack of commitment to rectifying systemic issues and mitigating risks associated with the administration of prepaid debit cards. 

Furthermore, to the continued violations of the consent order directives, Bank of America 's misconduct extends to its handling of ongoing disputes and account reviews. The disputes initially reported in XX/XX/XXXX were not adequately addressed by the bank, necessitating a reiteration of concerns on XX/XX/XXXX. I personally invested significant time and effort, spending XXXX hours on the phone with representatives to address these unresolved issues. 

Despite these efforts, Bank of America 's disregard for regulatory obligations persisted, as evidenced by the freezing of the account on XX/XX/XXXX. Alarmingly, this action occurred even after the account had been closed, indicating a blatant disregard for consumer rights and legal obligations. The bank falsely asserted that the Department of Labor in the State of Maryland had directed them to freeze a closed account due to fraud, a claim vehemently denied by the State of Maryland. This misrepresentation not only undermines the integrity of the enforcement action but also constitutes a clear violation of the bank 's obligations outlined within the consent order. 

The consent order explicitly mandates the provision of redress to Affected Consumers, including compensation for unauthorized Electronic Fund Transfers ( EFTs ) incorrectly denied through the Fraud Filter and related Consequential Harm. Additionally, an individualized review process is stipulated to allow Affected Consumers to seek further compensation for financial harm exceeding Consequential Harm-related payments. Bank of America 's failure to adhere to these directives, including the provision of accurate and timely redress, further exacerbates the harm inflicted upon consumers and underscores its persistent non-compliance with regulatory requirements. 

Bank of America 's continued disregard for regulatory directives and consumer rights is deeply concerning and warrants urgent attention from regulatory authorities. Despite the clear mandates outlined in the enforcement action, the bank persists in its non-compliance and acts in a manner that undermines the interests and rights of affected consumers. 

The recent denial of disputes filed in XX/XX/XXXX, as though they were new claims, despite the bank 's acknowledgment of their backdated origin from XXXX, is a clear indication of the bank 's intent to obfuscate and delay the resolution process. This blatant attempt to manipulate the timeline of events to the detriment of affected consumers is unacceptable and should be met with swift and decisive action. 

Furthermore, Bank of America 's insistence on requiring affected consumers to submit reconsideration requests in writing, despite their prior knowledge of these disputes and their origins, smacks of retaliation and an attempt to impede the process of obtaining rightful redress. This tactic not only adds unnecessary barriers for affected consumers but also serves to prolong their financial distress and exacerbate the harm caused by the bank 's actions. 

Moreover, the bank 's demand for additional information to process claims, despite its knowledge of these disputes and their origin dating back to XXXX, is further evidence of its disregard for consumer rights and regulatory directives. This attempt to burden affected consumers with additional requirements is unjustified and serves only to hinder the timely resolution of their grievances. 

It is imperative that regulatory authorities intervene to ensure that Bank of America fulfills its obligations under the enforcement action and provides timely and appropriate redress to affected consumers. Anything short of this would signal a failure to uphold consumer rights and would embolden financial institutions to flout regulatory requirements with impunity. 

In light of the egregious conduct exhibited by Bank of America, we urge regulatory authorities to take decisive action to hold the bank accountable and ensure that affected consumers receive the redress they are entitled to under the terms of the enforcement action. 

The bank also continues to process claims through an automated process as stated in the audio submit as stated by the representative. Audio has been attached.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation