A pair of regulators slapped a total of $225 million in fines on Bank of America for failures related to unemployment benefit disbursements the bank made during the pandemic.

The Office of the Comptroller of the Currency (OCC) fined Bank of America $125 million, and the Consumer Financial Protection Bureau (CFPB) fined the bank $100 million for problems with its handling of fraud alerts on prepaid cards for unemployment benefits, the agencies announced Thursday.

The OCC said Bank of America froze customer accounts in 12 states due to fraud alerts, then failed “to adequately investigate and resolve consumer claims of unauthorized transactions,” according to an OCC press release.

Bank of America said it was hired by those 12 states to administer unemployment benefits, issuing more than $250 billion in unemployment benefits to 14 million people.

Bank of America “automatically and unlawfully froze people’s accounts with a faulty fraud detection program, and then gave them little recourse when there was, in fact, no fraud,” the CFPB said in its statement. In the fall of 2020, the bank installed a new fraud filter on prepaid debit cards “with a simple set of flags that automatically triggered an account freeze. This set a low bar to freeze the unemployment insurance benefits of many people, harming thousands of legitimate cardholders needing the money,” the CFPB said.

In addition, the bank made it difficult for customers to unfreeze their accounts. “People with unemployment insurance benefit prepaid debit cards could not make reports online or in person at bank branches. People were on hold for hours every day for weeks trying to talk to someone at the bank,” the CFPB said. Bank of America also referred customers back to state agencies, which were overwhelmed and not able to handle the volume of complaints.

The OCC said it found other problems with the programs beyond the issues of faulty fraud alerts and frozen accounts, including “in operational processes, risk management, and internal controls.”

The OCC ordered Bank of America to compensate customers who were harmed when the bank froze their unemployment benefits for nonexistent fraud. In addition, the bank must “take comprehensive corrective action to improve its risk management and oversight over the program as well as its contract review and approval process, and enterprise-wide complaints risk management.”

“This action arose despite the government’s own acknowledgement that the unemployment program expansion during the pandemic created unprecedented criminal activity where illegal applicants were able to get states to approve tens of billions of dollars in payments,” the bank said in an emailed statement. “Bank of America partnered with our state clients to identify and fight fraud throughout the pandemic. For example, we worked with California to identify hundreds of thousands of suspicious cards and assisted the state in protecting billions of dollars.”