FOR IMMEDIATE RELEASE:
October 11, 2023
CONTACT:
Office of Public Affairs
press@cfpb.gov
CFPB Exams Return $140 Million to Consumers Hit by Illegal Junk Fees in Banking, Auto Loans, and Remittances
New report shows most institutions have eliminated NSF fees, saving consumers $2 billion every year
WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released a special edition of its Supervisory Highlights focused on the agency’s efforts to protect consumers from illegal junk fees. The junk fees discussed in the report – including fees for fake paper statements and worthless add-on products for auto loans – can strain the financial stability of even the most financially savvy families. As a result of the CFPB’s supervisory work, the companies in today’s report are refunding $140 million to consumers, $120 million of which is for surprise overdraft fees and double-dipping on non-sufficient funds fees. A separate report today finds that most financial institutions have eliminated non-sufficient funds fees, saving consumers an estimated $2 billion every year.
“The CFPB continues to uncover junk fee scams that violate the law and undermine consumer trust,” said CFPB Director Rohit Chopra. "We will continue to combat the illegal fees cropping up in consumer finance markets."
This 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. CFPB oversight has identified instances of companies charging a variety of junk fees, including for:
Fake paper statements: Some institutions charge customers monthly fees for sending paper bank statements. CFPB examiners found instances where banks charged fees for statements they never actually printed or mailed.
Worthless add-on products for paid-off auto loans: When people purchase cars, they sometimes have purchase loan add-on products, like guaranteed asset protection (GAP) insurance. In situations when borrowers paid off their loan early or had their vehicle repossessed, CFPB examiners found that loan servicers continued to charge fees for the add-on products, which no longer offered any value.
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, CFPB examiners found remittance providers failed to refund fees when the money consumers sent failed to arrive on time.