SKN | Bank of America Reaches Settlement in Principle Over Unauthorized-Accounts Lawsuit

Key Takeaways:

• Bank of America has reached a settlement in principle with customers who accused the bank of opening credit card and other accounts without authorization. The financial terms have not been disclosed.
• The agreement remains preliminary: the parties must complete a definitive settlement, and the plaintiffs still need to seek court approval.
• The litigation follows a separate 2023 regulatory action in which the CFPB identified unauthorized account openings among several consumer practices that led to more than $250 million in combined redress and penalties.

Bank of America is moving to resolve a class-action lawsuit concerning allegations that employees opened customer accounts without permission, bringing a three-year legal dispute closer to a potential settlement. Court documents filed in November 2026 indicate that the bank and the plaintiffs have reached a settlement in principle. However, the agreement is not yet final, and neither the proposed settlement amount nor its detailed terms have been disclosed. For the bank, the development represents an important step toward containing a legacy consumer-banking dispute, while leaving the formal approval process outstanding.

A Settlement Agreement, Not Yet a Final Resolution

The lawsuit was filed in July 2023 in federal court in North Carolina. Customers alleged that Bank of America had opened credit cards and other financial products in their names without their knowledge or consent, subsequently exposing them to fees and other charges associated with accounts they had not authorized. The complaint also alleged that sales targets and employee incentives contributed to the conduct.

Bank of America denied the allegations and moved to dismiss the case in November 2024. The newly reported settlement in principle marks a shift from litigation toward negotiated resolution, although the parties must still finalize the documentation. Attorneys on both sides have asked the court to establish a January 11 deadline for the plaintiffs to submit a motion seeking preliminary approval. Until the agreement is finalized and approved by the court, the outcome and financial exposure remain uncertain.

The Regulatory Background Adds to the Governance Context

The civil litigation followed a separate enforcement action announced by the Consumer Financial Protection Bureau (CFPB) on July 11, 2023. The regulator found that, in certain instances, Bank of America employees had opened credit card accounts without customer consent and obtained consumer credit reports without a permissible purpose. The CFPB said the conduct dated back to at least 2012 and was linked to sales-based incentive goals and evaluation criteria that have since been discontinued.

The 2023 enforcement action required more than $100 million in consumer redress and imposed $150 million in combined penalties from the CFPB and the Office of the Comptroller of the Currency. Those amounts addressed several separate practices, including unauthorized accounts, credit card rewards issues and repeated overdraft-related fees. The CFPB specifically assigned a $30 million penalty to credit card rewards practices and unauthorized account openings. These regulatory payments are separate from the financial terms of the current class-action settlement.

Why the Outcome Matters Beyond Consumer Banking

For institutional stakeholders and internationally mobile wealth holders, the case is relevant primarily as a governance and operational-risk issue. The allegations concern Bank of America’s consumer business and do not, by themselves, establish misconduct in its private banking, wealth management or institutional divisions. Nevertheless, the dispute illustrates why clients assessing a large financial institution should consider the quality of its account-opening controls, employee incentive structures, consent procedures and remediation processes alongside its financial strength.

The next milestones are the definitive settlement terms, the plaintiffs’ preliminary approval filing and the court’s response. The undisclosed settlement value will also matter when assessing the financial and reputational implications for the bank. For sophisticated clients, the broader consideration is whether institutions can demonstrate consistent governance and accountability across their businesses. For a confidential discussion regarding international banking relationships, institutional due diligence and cross-border wealth structures, contact our senior advisory team.