On October 11, 2023, the CFPB released a special edition of its Supervisory Highlights focused on the agency’s efforts to protect consumers from illegal junk fees. According to the CFPB, the companies are refunding $140 million to consumers, $120 million of which is for surprise overdraft fees and double-dipping on non-sufficient funds fees.
From CFPB Director Rohit Chopra’s statement:
“The CFPB continues to uncover junk fee scams that violate the law and undermine consumer trust. We will continue to combat the illegal fees cropping up in consumer finance markets."
This CFPB’s Supervisory Highlights special edition covers junk fees in the areas of bank account deposits, auto loan servicing, and remittances found during examinations between February and August 2023. The Bureau found instances of companies charging a variety of junk fees, including for:
Fake paper statements. Examiners found instances where banks charged fees for paper bank statements they never actually printed or mailed.
Worthless add-on products for paid-off auto loans. Examiners found that loan servicers continued to charge fees for the add-on products that customers purchased even when borrowers a;ready paid off their loan early or had their vehicle repossessed..
Sloppy international money transfers. CFPB examiners found remittance providers charged hidden fees by taking money out of the funds consumers sent without properly disclosing them. In other instances, remittance providers failed to refund fees when the money consumers sent failed to arrive on time.
The CFPB also highlighted how service providers contribute to many banks’ illegal fee practices. According to the Bureau, the operation systems provided by these third parties allow banks to double-dip on non-sufficient funds fees on a single transaction. The CFPB has directed these service providers to stop supporting banks’ ability violate the law.
Read the CFPB’s press release here.
The full Supervisory Highlights report can be found here.