Bank of America Settles Fake-Account Lawsuit

Federal court documents reveal Bank of America has reached a deal to resolve claims that it opened thousands of unauthorized accounts, according to a notice filed in federal court Monday. The bank reached a ‘settlement in principle’ of class-action claims, originally filed in 2023, that allege its employees and agents knowingly opened accounts in the name of unknowing individuals, ‘motivated by pressure and incentives from management’ to grow account numbers, according to a June amended complaint, filed in U.S. District Court for the Western District of North Carolina.

Plaintiffs allege that employees at BofA began creating fake accounts in 2012 to hit sales goals, based on an incentive program created that year which tied pay for its management and employees to the number of new banking products or services opened or used by consumers. Many affected customers were often unaware of account openings until reviewing credit reports, according to the amended complaint.

Consumer Harm Alleged in Case

“Opening accounts has an impact on consumers, affecting their credit reports, imposing fees, and raising legitimate concerns about the safety of the personal information Bank of America is supposed to protect,” the complaint said. Among the plaintiffs is Andrew Beal of Layton, Utah, who had no prior relationship with the bank.

In or around October 2022, the bank obtained Beal’s credit report from Experian, and he was notified of a credit card registered in his name the following year. The complaint asserts he suffered significant harm, including unwarranted credit card fees, damage to his credit score, and the expenditure of time and resources monitoring for credit issues and fraudulent activity such as identity theft.

Legal History and Bank’s Prior Actions

The lawsuit originated in July 2023, filed shortly after the Consumer Financial Protection Bureau imposed a $250 million penalty on the bank for unauthorized credit-card account issues. Regulators stated Bank of America had illegally used or obtained consumers’ credit reports, without their permission, to complete applications.

The allegations parallel those against Wells Fargo in 2016, when a similar scandal over fabricated accounts led to regulatory penalties and a temporary cap on assets-later removed. In 2024, BofA sought to dismiss the case based on a theory that unauthorized accounts were opened by third-party fraudsters rather than bank employees. A judge rejected that theory in 2025. ‘Defendants’ premise that Plaintiffs avoided pleading third-party liability presupposes the existence of facts not in the complaint – that third-party identity thieves opened the unauthorized accounts instead of BoA employees,’ District Judge Max Cogburn Jr. wrote.

The settlement agreement has not yet been finalized. Both parties have requested a stay on all remaining deadlines to focus on finalizing the proposed settlement and have proposed setting January 11 as the deadline for plaintiffs to seek preliminary approval of the agreement.